Legal Question in Real Estate Law in California

Your best bet is to have your grandmother place the two properties in a revocable trust (also called a "living trust") of which you are the beneficiary. That way, when she dies, you become owner of the properties (a) without going through probate, and (b) with a stepped-up "basis" for figuring the capital gains tax when you sell them.

Here's a numeric example. Suppose grandma acquired the properties in 1955 for a total of $25,000, and they are now worth $250,000. She dies in 2016 and the properties are worth $300,000 then. If you receive the properties as a gift today and sell them for $320,000 in 2017, you will owe capital gains tax on ($320,000 - 25,000) or $295,000. If the capital-gains tax rate is 20% in 2017, you'll owe the IRS 20% of $295,000, or $59,000. However, if you acquire the properties in 2016 via the trust, your basis is $300,000, your gain is only ($320,000 - 300,000) or $20,000, and your tax is only $4,000, a saving of $55,000.

Of course, you run the risk that grandma will change her mind and revoke the trust or replace you with someone else as beneficiary.