Death of participant and beneficiary

[Monica Barnard]

CPA has asked the following:

Mr A is a 401k participant with his wife as beneficiary

Mr. A dies unexpectedly

2 months later Mrs. A dies after a long illness

Mrs. A does not re-designate with the 401k her beneficiaries

His estate beneficiaries are different than hers ( I don't think this matters. I believe at this point, the account balance belongs to her beneficiaries)

The 401k plan as currently written will only allow for either a lump sum distribution to her estate or for distributions to be made to her estate over 5 years.

That would leave us the alternative of her beneficiaries reporting the 401k all in one year or keeping the estate open (with a 1041 each year) for 5 years.

It also complicates the form 1041 (I have not researched this yet) in that we would need to allocate the 401k income passed to the estate to her 3 beneficiaries while allocating the other estate income to his family.

Can the 401k be amended now so that it could be rolled over into 3 IRAs- Estate of Mrs. A fbo beneficiary 1,2,3?

If not can it be amended to allow the 401k to be rolled over into one IRA Estate of Mrs. A which could be subsequently split into 3 Estate of Mrs. A fbo beneficiary 1,2,3?

Thanks for your help on this.