Princess will survive!

It's solid for the most part and if you do it right, you can survive any financial storm and build wealth for generations. 

But, smart or not smart the key to survival is discipline. 

She claims it survived a previous cleaning, which may be true.

Need to have deep pockets to survive when the investment property values tanked and passive income(i.e. rental) stopped.

Do mortgages survive reverters? 

That is a mandatory requirement if you expect to survive in this business.

Her only surviving heirs is her daughter (my mother).

The cat had gone through the single bowl of food they left, and had taken to eating its own excrement to survive.

While it could be distributed, it will come out as gain as well; (3) there is no "step up" in basis at the death of the shareholder, except as to the basis in the S corporation stock (which is not depreciable) - thus, the surviving spouse can re-set the basis and re-depreciate the property (or sell it and recognize no gain).Most investors I know either use trusts (a discussion of trusts is beyond the scope of your question), or LLC's taxed as partnerships when investing in depreciable property.