1. You need a SR unit that you want to inherit a skill at Lv35 or higher and you need the unit with a skill you want to transfer to be Lv55 (fully evolved) and SR or higher. Getting to Lv55 requires quite a lot of exp. You get to choose which skill to transfer and it is added to their current skills, not overwritten, so they will have 4 skills.
2. The daimyo can start it whenever they want, once a day. If you don't stay home 24/7 or aren't paying attention, most likely you'll end up missing it. Probably one of the worst feature for this game IMO. Depending on the server, the current daimyo might have some time announced on some facebook page or something. I've been playing since launch and I've only made it to 2 of them...