Under the current Dept of Revenue guidelines, each one of your kids can receive 30,150 euros worth of cash/property/stocks etc etc from a grandparent before they have to pay Capital Acquisitions Tax on them.
(Link to threshold levels here:
http://www.revenue.ie/en/tax/cat/thresholds.html )
Once the 30,150 threshold level has been passed, CAT tax at a rate of 25% applies. This threshold level applies whether or not the kids receive the funds in an inheritance after their grandparent has died, or as a gift when the grand parent is still alive. If the cash is left to them as a lump sum, the CAT tax would be applicable on everything over 30,150.
If your MIL plans on buying them a house, she should get professional tax advice. It may be that their individual shares of it are under the 30,150 threshold, but owning a piece of property is always more complicated than a big ole wad of cash, so you can't be too careful there.
If your mother in law leaves anything to her grandkids, its is theirs to do with as they wish. They can not be made to give it to you & your husband to pay off your debts. If your hubby decides to renounce any inheritance in favour of his kids, he may run into trouble doing so. This is especially true if there is a civil judgement against him (such as a bankruptcy) as any monies that he comes into, will not automatically be his to do with as he pleases.
If he is able to renounce an inheritance in favour of his kids, then the kids will inherit directly from their grandmother, and the CAT inheritance tax issues mentioned above will still apply. It would probably be better for your MIL to avoid putting your hubby thru all that hassle, and just leave the property to the grandkids in the first place.
Bear in mind that the CAT threshold figure of 30,150 may change if the government decide that they want a bigger slice of peoples property. The CAT threshold levels have been coming down for years now, so there is no way of knowing where they may be at 5, 10, 15 years from now.