Restoration can be a pricey affair.  On the one hand, you have an obvious 1895 rifle that still has it's full length barrel... one that HAS a hit on the SRS records too!  However, you would need the correct stock, handguard, and barrel bands, and that could wind up costing you some serious moolah.  Being a family heirloom, you might consider keeping it as is, and save up to buy another Krag in all it's full military glory. 

What ever route you take, the decision can only be made by you.