They are not likely to accept the form now. And if the children were not listed as contingent beneficiaries, the estate will most likely be the default beneficiary. If the decedent had a will that showed the children as beneficiaries or even if state intestate provisions applied, the estate executor has the right to assign the estate inherited IRA out of the estate to the will beneficiaries. That said, while the IRS has clearly authorized this assignment for decades, some IRA custodians, and more likely insurance companies will not cooperate with the executor. If so, the executor might be able to locate an IRA Custodian, most likely a brokerage firm, that will cooperate and could then transfer the inherited IRA to that custodian.

With assignment, each child would receive their own inherited IRA, but the RMDs would still be dictated by the estate rules. The 5 year rule applies if decedent passed prior to RBD, and the remaining LE of decedent if they passed on or after RBD.

If none of the above can be completed and a distribution is made to the estate, the executor could pass through the distribution to each beneficiary and they would be taxed at their individual marginal rates, rather than being taxed to the estate at the higher estate rate.

Anytime someone submits a beneficiary form to a custodian, they need to follow up to make sure it was processed and should then recheck every year or so to make sure that some system update did not drop the beneficiary.

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