Whatever is the deal, I'd suggest TS to make it official in black and white form.
Meet any Commissioner of Oath to help you simplify the terms & he will sign, then the paper become legal.

The problem will be more complex if your FIL suddenly pass away. All the family tree will attack each other and it is not good for the long run.

So TS, make a draft first. If you wanna be neutral, stay out of it and suggest they meet third party/professional. If you wanna involve, but pandai-pandai, later you got yourself into deeper shithole.

ok that's great.

cus who know later other lady or other children come and challenge the decision. If FIL or anyone involve in this matter have Black and White, a lot of things can be saved (from conflict)