Sorry for your loss.
I'll go against the grain here and say that you not feel bad to respect his wishes. I think people are quick to make assumptions on behalf of the dead.
However, there is obviously nuance here. I assume they are well off, but are they? For example, if he was spending way above what he should have compared to their wealth, I feel like she deserves to know. But if they are very wealthy, I don't think you should feel bad.
But that's all it boils down to: what you feel. If you feel inclined to tell her and that it'll lighten an emotional burden for you, go ahead. But in my view you shouldn't feel bad otherwise, except of course, in context of them not having a lot. You heard the man, if the money just goes to clothes and the Bahamas...
For the legal side I know jackshit and you'd best hear with a lawyer about that.
Try to take a mirror picture of it. On wrist shots watches typically look bigger than someone else would see it. But from this angle it’s not abnornally big, but definitely leaning more towards too big than a perfect fit: