Legal Question in Wills and Trusts in California

I'm assuming that your father is now deceased, so first off I'm sorry for your loss. What the lawyer should tell your sister-in-law, however, is that she has nothing to worry about. Had your brother died before your father, there might have been some issue. However, having survived your father, your brother's inheritance belongs to him and will pass to his heirs when he dies. Just because it is in the form of a house and not cash in his bank account makes no difference. It sounds, however, as if you have not yet probated your father's will. That needs to be done pronto, both because the law requires it, and because you don't want to have to scramble to put the house in the names of living people when you go to sell it, since you never know what might come up in a probate and you want your title to be clear when the market improves. I assume your father's will named an executor or coexecutors. Whomever that is/they are, they need to get his estate distributed, including title to the house being put in the name of you and your brothers. There is no good reason to leave it in a dead person's name, and many potential legal problems.

If your brother dies without a will, his inheritance (separate property) will be divided between his wife and his children. But, he may have, or can make, a will leaving everything, including what he is due from your father in law's estate, to his wife. Either way, there is no reason for you to get in a legal fight with her. Whichever of your father in law's children was named Executor in his Will should file a petition for probate (unless he had a living trust.) Either way, the Executor/Trustee has the first decision off whether to sell the house or distribute it to the heirs.