My colleague is correct, the fact that you live in different states does not present any bar. You ought to consult with an attorney aobut how best to accomplish the transfer. Your father-in-law may want to transfer it into a trust rather than directly to your husband. There are gift tax consequences to consider in a direct transfer. If the point is to limit tax liability, then the mode of transfer should be given serious consideration.
You do not have to live in the state where you own real property.
Many people own homes in two or more states. Most "snow birds" from the Northeast travel from their primary home there and go dow to Florida to their second home.
If your father in law's chief concern is avoiding taxes, he would be best served by consulting with a probate attorney who can advise of the best ways to convey assets to heirs.
If this answer was helpful, please mark it as helpful or as a best answer. This answer is for general education purposes only. It neither creates an attorney-client relationship nor provides legal guidance or advice. The answer is based on the limited information provided and the answer might be different had additional information been provided. You should consult an attorney.
Where you live makes no difference as to the transfer. However - there are many ways in which to effectuate a transfer each with different pros and cons. You and your father in law should consider what the goals are - tax planning, asset protection, etc, and the impact - loss of ownership, loss of tax benefit, gift tax consequences, effect on basis step up, etc.
I would be happy to consult with you about the various methods and corresponding effects. Contact me at 518-464-0640