Your grandfather is using his wealth to manipulate your life. Are you next going to let him influence the timing of your children? The schools they go to? The friends they have?

'Let it be known' has to be the ultimate in unenforceable verbal contract. There would be a hard lesson indeed if he didn't pay.

You need to talk with your gf, so you can stand in her shoes for a while. I imagine she's thinking about the future. There's a few things which could be on her mind. (1) Timing of children. She'll be what? 29-30? And that's assuming she gets to the altar and isn't been stuffed about for half a decade before being dropped and having to start over. (2) Relationship with her powerful in-law. Will her children escape the same sort of ridiculousness? Is this being on his hook for the first five years a sign of the next fifty? God knows what conditions his Will has to make her life a misery. (3) Your relationship with your powerful grandfather. Why isn't it better? Why isn't it so good that he knows you and her and wants you both to be happy asap -- like a normal grandfather? (4) You. Just how much can she rely upon your love for her versus your love for the wedding gift? Her darkest thoughts probably have her wondering if she's nothing but a device for you to get money.

The agreement also freezes your relationship. It can't be developed by any of life's usual events. That's likely to frustrate someone looking to move a relationship along in the usual way. And it has already stalled for two years.

Now some of those thoughts are darker than others. But I do think you aren't approaching your gf with the possible views from her shoes in your mind. Otherwise you'd be a lot more hesitant in thinking your grandfather's offer as reasonable or as one you and her should have accepted without much hesitation.

TBH I probably would have agreed, and then dropped you a few days later as the reality of five years of statis dawned upon me.