Settlement deed to son and daughter in law jointly

She can execute a Gift deed jointly in the name of her son and daughter-in-law.

The settlement deed can be executed in favor of the blood relatives, the daughter in law is not a blood relative hence only gift deed can be executed in her favor

Gift deed can be executed by absolute owner of property whereas settlement deed is executed among share holders and persons having rights in property. If your mother is absolute owner of property then she should execute gift deed  in favour of his son and daughter in law.