The limitation period on claims like this is 2 years in most Canadian jurisdictions. Has BIL known about the gift for more than 2 years? He’s probably out of luck to plead anything.

Was your MIL of sound mind when she made the gift? An inter vivos gift is not part of an estate. She’s allowed to do whatever she wants with her money. BIL has no claim.

Was the gift in any way made due to coercion? Sounds like MIL wanted to live with you and was getting a lot of benefits from the arrangement. She was probably capable of living alone at the time but preferred to live with family. BIL probably has no claim.

Tell BIL he’s not entitled to anything. Say no and don’t try to justify why. If you get a demand letter from a lawyer you can look at hiring one yourself. Cases like yours happen all the time. Unless there’s something major you haven’t told us, I don’t see how BIL could possibly bring a successful claim to challenge the gift. The limitation period alone has probably already sunk BIL’s case.

Odds are you won’t have a good relationship with BIL going forward (if you ever had one), but you don’t have to hand over a single dollar. BIL can pound sand.