Hi. I'm assuming by your question that your husband's mother is deceased. Given that the house is in his mother's trust and given that he assumed the role as successor trustee upon her death, here are the steps:
1. Record and Affidavit of Death of Trustee along with a Preliminary Change of Ownership Report. The recording of the Affidavit is proof (you attach a certified death certificate) that the original owner/trustee has passed away and that your husband, as successor trustee, can make subsequent property transfers in his legal capacity as trustee.
2. Your husband can then execute a grant deed as trustee of the trust to himself as an individual. This is normally when I'd send in the Claim for Reassessment Exclusion for Transfer between Parent and Child, but since you've already done that, you don't have to do it again. You'll still want to send in another PROR with this deed.
3. Your husband, as an individual, executes a grant deed to transfer the property to the two of you as trustees of your family revocable trust. Again, send another Preliminary Change of Ownership form along with the deed.
Don't worry about a Grant Deed versus Trust Transfer Deed form, it's really the same document. The Trust Transfer Deed forms you'll find don't generally differ from the standard Grant Deed forms other than the may have preselected certain options, such as declaring the transfer a gift and thus exempt from the documentary transfer tax, which answers another one of your questions.
If your mother-in-law has died and under the trust, your husband receives the property, then all he needs to do is to execute a grant deed or trust transfer deed to transfer the property from himself as trustee to himself individually. From there, he should execute another deed to transfer the property from himself to the trustee(s) of your revocable living trust. PCORs should be used with both deeds.
This general response is not intended to create an attorney-client relationship.
The answers provided are an accurate summary of the steps required. The devil is in the detals. You do need to be careful to correctly implement each transfer step and to avoid reassessment for property tax purposes. This is straight forward, but it may be desirable to engage counsel to complete the title transfers to assure it is done correctly and that you do not create title problems for yourself in the future. You may also want to consider a title insurance prolicty to confirm the transfer and that your husbands mother owned the proeprty without any title issue.
The response to this question does NOT create an attorney client relationship and is an effort to provide a gratuitous general response without ability to determine accurate facts. An attorney client relationship can be implemented only be a formal engagement letter accepting representation. Do not rely on the response provided herein as advice to you.