As Horny has alluded to, the key question is whether your mil left a Will and whether the executor(s) are in the process of applying or have been granted probate?
If there is no Will see here www.gov.uk/wills-probate-inheritance/if-the-person-didnt-leave-a-will
Magoria has rightly raised the question of who is named on the deeds to the property as this may have bearing on the eventual division of your mil's estate.
It seems to me that until the formalities have been completed your dh and your other sil are being premature and it's not surprising that, having so recently lost her dm who she, presumably, lived with for many years, their dsis is finding it difficult to come to terms with the possibility or probability that she may lose her home in the not too distant future.
If their dsis lived with their dm since birth and, effectively, the only home she has ever known (apart from, say, time spent completing her education at university or similar) has been with her dm, it could be that she may have or find cause to challenge the Will/divison of your dmil's estate.
Sadly, unseemly wrangling issues which the deceased didn't envisage when drawing up their Will/making provision for the distribution of their estate are not uncommon and it's to be hoped that your dmil's estate can be settled amicably without need for any beneficiary to incur costly legal fees.
in memory of your dmil and a
for you as I have a feeling you may need it. 