I think I would feel annoyed like you do...I can somewhat relate. My in-laws set up a fund to invest (not much, but still something) in a college savings 529 for DD1, and assume will do the same for DD2. The annoying part to me is that WE already set one up, and they are not contributing to that one at all, they're doing their own and I pretty much know nothing about it except that they plan to deposit a small amount at Christmas and Birthday. So, after being annoyed initially, I'm trying to remember that they are really trying to do a good things for our daughter's futures. They (especially FIL) will likely not be around when our girls start college, so they are trying to do a little bit to make an impact on the future when they are not around. (Additionally, they receive a state tax benefit for investing in their home state vs ours, so I understand that too.)
Anyway, I guess all I'm saying is that maybe it's coming from a really good place, but FIL isn't handling it right. He shouldn't give you something that obligates you to do something you're not comfortable with.