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Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question and respond.
Either a note or acknowledgement of gift letter is a good idea to protect you.
You may want to have a local lawyer prepare a simple contract here stating it is a gift and she will pay or a promissory note if you are intending to pay.I really worry about this turning out to be a scam especially since she has a contractor lined up.The lawyer here locally can check this person out to verify whether they are legitimate.It will be money well spent.You cannot be too careful here.This sounds too good to be true.
I appreciate the chance to help, please let me know if you have more follow up.If you can leave a positive rating when we are done it is always sincerely ***** ***** with the remodeling.