A few questions -
Can you afford to make your MIL a quilt?
If your finances are limited, perhaps you could ask her to contribute to the cost of fabrics?
Or to have her pay for the quilting if she wants machine quilting?
And before commiting to make a quilt, find out what she wants.
I offered to make a quilt for my (now) DIL - and she wanted a floor-length king-sized one. We settled for a cover-the-mattress-sides size -
I (now) consider taking my OWN wishes and needs into consideration a very valid part of the process.
If you want to get some input from your MIL - that's good - also feel free to give her input back - cost, difficulty, etc. etc.