Unlike Grelod, it's hard to cause in-game accidents due to the lack of "insta-death." I managed to develop a system where I gifted the kids large toys now and again until Grelod eventually tripped and died.
With this, I don't know how we could solve it any other way.
Bob, I'm thinking hunting accident if you can't stand murder. The man wanders outside, you mistake him for a doe, and the children are freed. Remember: your character doesn't know what you know.
Killing him is not enough. I also go the extra mile and reanimate him. I then kill him again. I then instruct Sissel on how to reanimate his cruel corpse. Goodness knows she might need to know some necromancy if her sister keeps up with the bullying. She's a quick learner. With my teaching, she'll be reanimating Draugr Scourge Lords by the time she's 16!