Would be easier to keep the money if I had no idea where it came from, or even better if I knew it came from some undeserving rat (like a greedy ass CEO of a major corp that treats its employees like dirt) but since it came from some old dad and was for his kids, I'd likely return it.
Who knows in today's economy if they even made any money on the house. Consider large medical bills of a sick and ailing parent, hell maybe he even had a reverse mortgage and they got zip, BUT he put a bit of that away up there each month and it was his only asset to pass on. Just too much guilt and waaayy too much karma for me.