The Section 1031 related party rules are controlled by Section 267(b) and an in-law would not be considered a "related party" for the purpose of the like-kind exchange.
However, a couple of caveats:
1) There could be an issue if they reside in a community property state; and
2) If your son-in-law decides to transfer all or part of the property to your daughter at some point, the IRS could view that as a step transaction.
You should absolutely consult with local legal counsel as well as a local exchange facilitator with respect to this matter.
