It's better for her to leave it directly to your children.
If she leaves it to you first, you are in Group B and get €32,500 exempt from CAT, and then you pay 33% on the balance.
(If you then gift the proceeds to your children, they would get up to €335k free of CAT)
If she leaves it to say, 3 nephews and nieces, each gets €32,500 exempt from CAT, so that would be an extra €65,000 free of CAT. And they would not be using up their allowances in Group A from you.
It might work out differently if your children have already received Group B gifts or inheritances, or are likely to do so in the future.
Brendan