I just starting looking into this for her. From what I've read so far, the idea of moving this lump sum to an IRA sounds like the best option. I was wondering what I advise other Fools might have. Any thoughts?

The last poster said someone might come along and suggest an annuity. I'm not going to do that, but I am going to say don't forget 10 year averaging. The distribution might be eligible for that treatment and then you get all the money, but pay taxes over ten years. Depending on her exact tax situation, it might be more tempting.