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To the extent (if any) the group health plan uses a health insurance contract, consider whether a relevant State's insurance law or the contract might provide opportunities different than those of Federal-law COBRA.

As time goes by, and with more fee transparency, what the advisor is paid is less and less relevant to what the recordkeeper is paid. If there isn't enough from "rev share" to pay both, hit the account balances. It's up to the plan sponsor to determine if the fee paid to the advisor (whether based on the loan balances or not) is reasonable. And yes, I've been with recordkeepers who have, at the direction of a plan fiduciary, done this. Loans are in fact part of the plan balances....

I replied to your other post, and continue to not be a lawyer. I would expect that the estate is responsible for the bills, not you. If the estate has any value, the bills could be paid from the estate (including the funeral home charges if not paid - if already paid, you could seek reimbursement from the estate). If the estate hasn't got a sufficient value to cover outstanding debts, you should bear no responsibility personally to pay them. If the property is not mortgaged to full value, you may be able to take a loan on it to pay off, for the estate, the outstanding debts. If the property is fully mortgaged and you wanted to maintain possession of the property, you would use personal assets to pay the taxes. The other creditors can, perhaps, be permanently denied payment unless the property was used as collateral for the debts without it costing you ownership of the property. Local laws may extinguish debts upon the death of the debtor. There may have even been some sort of insurance in connection with the mortgage eliminating the mortgage debt. See a lawyer.

My condolences for your loss. Normally, the plan is the only vehicle for defining both the benefit and any (potential) beneficiary. For example, most plans, if no beneficiary is specified, will include a sequence of others to define a beneficiary (such as: first children, then parents, then siblings, etc). This may not apply in your case. If you have not done so, ask the Plan Administrator (which might be contacted thru the HR department of the company) to explain the beneficiary situation to you. To my ear, having a "friend" defined as the beneficiary is very unusual, so there might be more relevant facts. I'm unsure about your phrase "override the beneficiary", but an estate lawyer may tell you that would be possible only if you can prove fraud or some other incorrect application of the plan rules. At least for me, it's not obvious whether you would have any standing to submit a DRO. BTW, the lawyer may also tell you that the "estate bills" are the responsibility of the estate, not you. (I'm not a lawyer.)

This was a point of contention about 10 to 15 years ago. Right now, a severance of employment would be deemed to exist under this circumstances unless the purchaser of sub 2 actually agrees to take over sponsorship of the sub 2 part of the plan. So, if the purchaser of sub 2 say "Hey, we're buying this division (or subsidiary), but we want nothing to do with the plan, and it will remain with the sponsor", then this will be considered a severance of employment for all sub 2 employees who are now employed with the purchaser. Good Luck!