Praise be to Allah, the Lord of the World; and blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.
If your wife's holdings reach the Nisaab (minimum amount of property liable to Zakah) and one lunar year has passed over it then it is obligatory for her to pay their Zakah.
It is permitted for her to give the money of Zakah to her nephews if they are needy. But it is not permissible to give the money of Zakah to her daughters. It is not permissible in Shariah to give the money of Zakah to one's parents or grand parents or to one's own children or grand children.
If they are in need one has to spend on them from his own money not from Zakah.
Allah knows best.