IRA with no designated beneficiary

Husband's IRA was kept at a bank. Unfortunately, no beneficiary was designated. There is a will, which says that upon his passing everything goes to the wife.

The bank says it cannot do a direct spousal rollover. Instead, they want to roll over to an account for the Estate, and then the spouse can get it.

Would she then be able to roll the proceeds into her own account? Would it be considered an inherited IRA or would it become hers as a spousal rollover? Obviously there are significant tax and RMD implications, etc.

Thank you

What does you Order of Precedence say. 

An IRA is a non-probate asset that does not generally get settled through a will.  The IRA designation forms and agreement will determine the beneficiary.  If there is no designated beneficiary, then you look to the IRA agreement to determine the beneficiary.  Each IRA custodian has its own agreement and each will have their own provision to determine who inherits the IRA when there is no beneficiary named on the form, when there is no form at all, or when the form is defective.  Sometimes it will be clean and simple with the spouse as the default beneficiary, then the children, if there is no surviving spouse.  But, here, based what the bank is saying, your IRA agreement may provide that upon the death of the account owner with no designated beneficiary, the proceeds will default to the estate of the account owner.  You should confirm that this is correct by asking the IRA custodian for a copy of the IRA agreement and for them to point you to the portion of the IRA agreement that provides the default beneficiary language (or as fmsinc states, see "what does your Order of Precedence say"),  

In these instances, we have seen where IRA custodians will not permit an estate to assign or transfer the IRA out of the estate to a properly titled inherited IRA for estate beneficiaries, although the IRS permits it, and will instead require that the entire IRA balance be paid to the estate. Regrettably, unless the IRA agreement states otherwise, this appears to be within the IRA custodian's powers.  If this is done, it will be a taxable distribution(s) that cannot be undone. (Also, depending on the size of the estate there may be estate taxes.)  If the beneficiary is the estate, the balance would be required to be paid out to the estate within 5 years.

Which is why "Estate" is almost never a good designated beneficiary for either qualified plans or arrangements such as IRAs.

Thank you, much appreciated!