Okay. A couple of things. This is all general, because I don't know your situation specifically. But:
When a person dies, their "estate" is responsible for handling their money and assets, doing things like transferring this house you're receiving. It's sort of a fake legal person, run by an administrator who's responsible for it. It will usually hire a lawyer and maybe an accountant to help, but that's up to the administrator.
If you are inheriting a house from someone, their estate will need to arrange to transfer the title to you. Ordinarily title is transferred in a "fee simple conveyance." Conveyance just means transfer; fee simple means that you are conveying the *entire* right to the property, instead of something smaller like the right to rent the property or the right to own the property for a year or the right to live on the property until you die.
In order for a transfer to be effective, certain formalities have to be followed. Things like a signed deed that contains a legal description of the property. These can vary a bit from place to place.
You *also* want the transfer to be registered. This makes it harder for someone else to come along and say "No, honestly, see this fake deed I pulled out of my pocket? They sold me the property a day before they died so I should be the owner instead!"
You *also* probably have to do things like make sure that the mortgage is no longer filed as if it had not been paid off. Mortgages get registered too, so that nobody buys the house and doesn't realize there's a mortgage. When you finish paying off the mortgage, the bank sends you a document that you file to basically revoke the registration. So when you get a house, you want to make sure those kinds of old mortgages aren't still registered.
The same thing is true of "mechanics' liens" for work on the house somebody was not paid for.
And of course there may be back taxes.
So there are a few steps in transferring real estate. A real estate lawyer who does this all the time in your area knows what they are and can help make sure you get it right. The estate may have a lawyer, and they may also be fine and able to do it. They represent the estate, not you, so their duty is to the estate, not to you. They might not do as much real estate work as who you would pick, so they may miss something, but it's still their job to get it right for the estate.
It may be that they or the estate administrator might also need to talk to a bank for you, for example, to get evidence that the old mortgage is paid off--that's an example of something you or a lawyer representing you would want to make sure was taken care of when you got the property, which the estate lawyer might or might not take care of properly otherwise.
I gathered from your original post you were *inheriting* a home. Inheriting a home is different than buying one in some important ways. But you also refer to a life insurance policy. If you are getting the money to buy a home from a life insurance policy, then you are *buying* a home, which is different. I am going to guess you are inheriting the home and there is a separate life insurance policy which you and your mother are beneficiaries of (i.e. receive the money from).
However, if the *house* will be split between your mother and you, you will want to make sure that your mother makes a new will so that if, god forbid, anything happens to her, you make sure you (or better, a "trust" for you) own the other half of the house, or at least can live in it for your lifetime. Trusts are fictional people, and if used right make it harder for creditors to go after the asset. (E.g. if you owe money, a trust can make it harder for them to take your house). Depending on state law and how good you are about debt, that can be important.
It's really important to find one or two people to help advise you or who you can bounce ideas off of. Maybe friends who have a little more financial or homeowning experience, that kind of thing. For discussions of necessary work, maybe a contractor you trust.
Contracting. Dealing with contractors can be a big part of owning a home. A few key things: (1) almost always get multiple bids, at least for big jobs. It can save you 10% or more, which adds up. Just make sure you are very clear about the job and give everyone the same project to bid on. (2) A contractor who will tell you you should not do a big job is worth his weight in gold. Because that is what he saved you. Unless he just doesn't want to do a messy job, which sometimes happens.
Finally, the insurance money. Be very hesitant to go and spend it all to fix up the house immediately. Owning a house is a long-term investment, and it will always take however much money you throw at it if you're not careful. You need to be really savvy about deciding what makes sense to invest in. Different investments make sense if you intend to live there for five years than if you intent to live there for twenty. And it's rare that you should make an improvement to a home just because it would be better. That being said, it's really important to spend the money you need to spend--nickel-and-diming is bad; but deciding whether you really need a particular project done and how much you are willing and able to pay for it is really, really important.
I would focus first on things that cause imminent dangers (sewer gas buildup from uncovered pipe, charged electrical wires sticking out of the wall, broken glass in the front door, piles of stuff next to the baseboard heater) and on things that cause additional damage if they are not addressed (e.g. a leaky roof, plumbing leak, gutter problem, basically water intrusion of any kind).
Then on core issues that will cost you more money if you don't address them now (especially if you'll be living there for time--lead pipes that need replacement, plumbing that hasn't been touched since the 50s, etc... ). While the walls are open might be a good time to do some other work, but be careful because the project can grow really fast. These projects can swallow massive budgets so you may need to prioritize. These can be big jobs and you *should* be getting multiple bids on them. How much of this makes sense DEPENDS on how long you plan to own the home.
Along the way there may be some small, useful safety upgrades (adding a GFCI outlet to protect a circuit is cheap). Then on any serious backlogged maintenance issues you probably have.
Any money you don't really NEED to spend to save yourself money down the line and bring it up to minimum standards of safety and livability, put most of it into retirement or an equity account and let it generate money for you or your mom.
I would just be really cautious about looking at it as the money you have to fix the house, because thinking about it that way makes you much more likely to spend all of it. It's much better to think of it as a nest egg to help you maintain the house and/or retire on one day. Take out some as you need it to do work (keep in mind some retirement accounts have rules around this), but it's a lot better to have an acceptably but minimally maintained house you can live in and maintain for thirty years than a house that is very shiny to begin with but you are forced to sell it in ten years because you can't afford the maintenance or you need to help support your mother and the house is the only valuable thing you have.
Expect maintenance to cost more than you expect. Expect projects to cost more than you expect. Budget for a buffer or emergency problem. Prioritize so that even if emergencies come up, you can get the most important stuff done.