Actually I don't have in-laws. I rather appreciate that fact. That may come across as disrespectful since they both passed away before me and my husband met, but nonetheless, it is one less problem to deal with.

Ok, so it may be too late as far as this house goes, but in the future I'd say try to keep them out of the loop as much as possible, until you absolutely have no choice but to tell them *something*. Telling them they have a grandchild on the child's first birthday probably won't go over well

If the issue is with your wife blabbing, then it may be that the real tricky thing here is not between you and the in-laws, but between you and your wife. Keeping the in-laws out of the loop is a pretty simple and effective solution. Telling your wife not to talk to her parents about the goings-on in her life, that could be much trickier, depending on how good or bad her relationship with her parents is.