Is the husband sinful for severing ties with his father who molested his daughter, and is the wife sinful for hating her husband's family for their actions, knowing that the husband's mother was aware of her husband's deed?

The father-in-law's bad action does not justify the husband severing ties with his father, for the right of parents is great, even if they do wrong. The husband must honor his parents, especially his mother. The wife is not obligated to maintain ties with her husband's parents, but it is not permissible for her to encourage him to cut them off; rather, she should encourage him to maintain ties with them and treat them kindly.