She’s in the other room and we’re kind of not speaking right now. Don’t think she took it very well 
You know your life better than anyone else. If her mentor has convinced her that you’re tacitly sponging off of her in some manner, and this is now her reality, only she can decide to believe or discard that notion. You’ve made it clear that getting enmenshed in estate issues is not where you want to be relationship-wise, and given how Daddy Warbucks is apparently trying to control that particular situation, I think you are well out of it.
You’re being eminently reasonable on purely logical basis, but if she is that invested in you being a part of the estate, I think you need to talk with her about what she really wants. After 5-6 years it’s not unreasonable or unexpected that an SO would want to start merging their life with yours on a more than boyfriend/ girlfriend/hang-out-buddy-with- benefits basis.
Yeah, that tends to happen when people get answers they didn’t want to hear about romance or finance. Combine the two, and well, you see what happens.
I realize that you’ve already made decisions about what you are and aren’t willing to do about most of these issues, so some of these comments aren’t really relevant, but they’re things to think about if you guys are going to revisit these issues.
Let me get this straight. She wants you to help pay to renovate her property, which you have no legal rights to whatsoever, and increase its value because you spend a lot of time there (at her invitation). She also wants you to pay for the privelege of spending time in her home (again, at her invitation.) She further wants you to take out a life insurance policy with her as the benficiary, at considerable expense to yourself. In return, she wants to leave you her condo, assuming that she predeceases you.
That doesn’t sound like a terribly equitable financial trade, to me. She automatically benefits from the renovations and the rent, and you automatically shell out a lot of moola for these things and the insurance payments. She also potentially benefits if you die before she does, by getting the insurance money. However, the cost to her is minimal, whatever it costs her to change her will, and you only benefit IF you stay together for life and IF she dies first. From a purely financial standpoint, I don’t think I’d touch any of it with a 20-ft pole.
Emotionally, I don’t much care for the sound of it, either. The whole “freeloader” thing bugs me. That’s a horrible thing to say about someone you care about, and a horrible thing to let other people say about someone you care about. Her willingness to let her former boss talk about you like that, and her seeming willingness to sorta believe him, concerns me. It doesn’t strike me as a good omen for you two being together for the rest of your lives (which would make me even more leery of shelling out in expectation of getting the condo.)
And, of course, I’ve never been a big fan of the whole “if you love me, you’ll…” thing, which is probably coloring my perceptions somewhat. It smacks of emotional blackmail to me. I’m even less enamored when the elipsis is filled in with some sort of financial outlay. (Of course, I’m the sort of woman who is delighted with the prospect of her fiance getting her a doggie seatbelt for Christmas, so take that with a grain of salt.)
Things are better 
Turns out that what upset her the most is me saying I didn’t want her to leave me the apartment — what she had the big emotional investment in was the idea that “this is our home”, and she did hope I’d want to help make it a nicer place over time, but in particular she wanted to make sure I had the option of staying here if she died before me.
She said the convoluted proposal of “Daddy Warbucks” has been making her unhappy and the life insurance gambit was his suggestion in response to her insistence that I had to be given an avenue by which to inherit the apartment, which I would not have if he bought up the mortgage, she lived in the place w/o paying mortgage payments, and then his kids’ trust fund would sell off the apartment when she died and also claim from her remaining assets the unpaid mortage payments + interest.
With my counterproposal that she take me out of the will and take him up on the deal and just dont involve me financially, she got very upset and finally explained, “He says he’s proposing this to make me happy, you’re saying you were trying to do the right thing to make me happy, and between the two of you you’ve come up with the scenario that would make me the most unhappy on all accounts, for the rest of my life, that I could imagine being”.
It looks like she’s going to leave the place to me, that she’s not going to take him up on his offer, and that I’m going to split the cost of future renovations to the apartment with her, but will not be buying life insurance or paying “partial rent” just for staying here.
And for the first time this week my stomach doesn’t feel like it’s full of broken glass shards and steel wool.