...My feeling, and most of what I have read, says that her asset allocation is out of whack for someone of her age. ..

One factor in determining an appropriate asset allocation is the size of the portfolio. The larger that it is relative to the persons needs, then the less bonds are needed.

... Almost all the stocks have large capital gains, so a major rebalancing would trigger a big tax bill.,...

I didn't look at the specific stocks to try to judge there merit, but if they are not sold and go to her estate, then they go to whoever inherits them at a stepped up cost basis and no one has to pay the capital gains taxes.

My gut feel is that the investments were set up pretty good and assuming that there is more than enough to support her if she lives to be well past 100, then you are dealing with more with tax and estate issues than investment decisions. I would definitely suggest professional advice regarding the estate and tax issues. Even if she has had these set up professionaly set up in the past, the estate and tax laws have changed a lot in the last few years and they should be reviewed periodically.

...Do I need to do anything?..

You should make sure that there is a good "plan B" in case you are not able to manage her affairs if something happens to you.

If she is lucid enough to understand and can approve decisions, then you should make sure that all the wills and paperwork are in order. Setting up a trust now might eventually prevent having to go through an expensive and long probate process even if all the wills and such are in order. The probate process will vary greatly by which state you are in.

Greg