What is etiquette on returning a gift?

A relative of mine sent a card with cash in it for a birthday gift for my 1 year old. She has never met him, did not contact me when he was born and currently is not speaking to me and my husband. I feel awkward keeping the money and feel like I should return it to her with a note that expresses my appreciation but feelings of discomfort at this time. I do not want to make any feelings between us worse than they are and this could go really wrong. Wonder if anyone has some advice.