having rcently made a will and been advised on what NOT to do, i would say, it is only fair and uncontestable if she gets residency in the house for her remaining lifetime *and* some cash to live on meanwhile ... without cash to maintain the property and to get by, she would probably have a claim against the estate, so your FIL should ensure the wording of the will is correct to avoid this!
your FIL obviously doesn't want to give an inheritance to his wife's children!
cath x