What is best way to transfer ownership to children and avoid inheritance tax?

If she deeds it now and lives one year before dying, no inheritance tax. If she keeps it in the will and the kids inherit it when she dies, the estate will owe inheritance tax. Because the heirs are children the tax rate is only 4.5% and the tax liability can even be lowered on the return with the use of deductions. There is no right or wrong way to go on this. Talk to a lawyer as there are pros and cons doing it either way.