My mom is fine, but my grandmother has said exceedingly racist things to my wife and homophobic things to my sister. I haven't talked to her in years and I suspect I will not for the rest of her life.

People act like I am a douche for this, but at this point I really see three options here. A) I roll my eyes and let her spew her stupid racist bullshit and move on, B) I push back, start an argument, and really upset my mother (whom I do like), or C) drop contact with her. C seems like the least-bad option.

Kids owe their parents nothing. Not a single person on this planet asked to be born. If a parent (or grandparent) does something bad, the onus is not on the child to make things "right".

People act like you have to love your family no matter what, but I think that's pretty naive. If literally anyone I didn't share DNA with said something racist about my wife then no one would give me shit for not talking to them, but suddenly because I'm related to them I just have to let this bullshit slide? Fuck that bullshit.