David Holl was sentenced to a longer minimum period, of 15 years, because he was convicted of other violent offending.
At the time of the killing, the Holls had been staying with Mrs Grace in Picton, but relations had been strained, and the couple were asked to move out.
Mrs Grace then left the house, and David Holl, then aged 19, told his wife, 26, he wanted to kill his mother when she returned.
When she entered her house, the pair attacked her with an axe, dragging her into a bathroom where they repeatedly struck her with the back of the axe.
A forensic psychologist found Janelle Holl had a history of bipolar affective disorder type I, complicated by borderline personality traits.
There was evidence she felt trapped and intimidated in her marriage, and her family had tried to seek mental health services for her shortly before the murder.
Expert evidence at David Holl's sentencing said he had a severe personality disorder, and a fixation with violence and serial killing.
The Court of Appeal accepted Janelle Holl played a major role in the killing, in subduing Mrs Grace and striking blows that contributed to her death.
But it found she was less culpable than her husband, as David Holl had planned the murder, she was under his control, and he had played the major role in the killing.
She had no previous convictions, and her mental health did not point to a risk of reoffending, the judgement said.
The sentence was quashed and substituted with a sentence of life imprisonment with a minimum period of 12 years.