It absolutely does. You need to end the chain of responsibility somewhere, and stuff that my grandfather did to your grandfather is beyond the line of what's reasonable.
My uncle is a lawyer in Europe who specializes in art law and I can assure you based on listening to him talk about cases, that you are likely to have to return the stolen art if there is sufficient evidence despite any inheritances or intermediate transactions (at least in the nation where he practices).
However, returning the stolen goods is on a different level from taking on the penalties or damages of the initial theft.
