Gift of Real Property from Parent to Child

The family has owned some land in Northern California (San Joaquin County) since the 1940's. There currently is no living will, but the current owners would like to gift the land to one of their children to build a single family home for the purpose of their daugther and son-in-law to occupy. The daughter and son-in-law want to make sure there will be no negative implication to parents. What would be the steps to follow to make sure the land is transferred properly and what tax implications can be expected?

Additionally, would a contract be a wise idea as a mortgage will be secured by the daughter to build a family residence and part of the proceeds from this mortgage will be given to the parents to pay off the parents current residence (Alameda County)?

Any assistance or advce would be greatly appreciated.