My in-law side has some toxic and cancerous attitude that resulted my wife to cut connection with them(parents and her siblings) forever, due to keep asking unnecessary request and cheating both of us money, when they are already doing well(with houses paid off and no commitment). Finally they started to affect our business and our client because of my sibling in-law's wife who put bad review and comment on purpose for our company in FB & google, yeah we suspected that she created number of fake account to tarnish us...

My wife had endured and gave in for many years and finally decided to end it.

Although I had tried to bring them back numerous time in good terms, but it doesn't work at all. We seek consultancy and advice from professionals, they did said the same like talk it out in a proper meeting. It doesn't work.

My question is, how to answer awkward question from our children in future if they ask "where is mommy's parents?"
My wife had prepared to answer that she doesn't have sibling and her parents died long time ago. Although I just don't feel right to lie to our kid, but is that the only way?

they are 2 year and 3 year.

I am just worried they would treat us the same when they know they can do this, u know in future when argument happen between families.
Although we always try to be the best of us.