Yes, that is correct. Each beneficiary needs to decide how to take their distribution.
If one chooses to receive the entire account balance rather than roll the amount into an inherited IRA, that doesn't remove the responsibility from the other two beneficiaries to take their Required Minimum Distribution or choose to use the five year rule.
The alternative to taking your RMD is to use the five year rule. The five year rule requires the beneficiaries who are not taking RMDs a based on life expectancy to withdraw the entire balance of the IRA by December 31 of the fifth anniversary of the owner’s death.
For example, if the owner died in 2022, the beneficiary would have to fully distribute the plan by December 31, 2027. The beneficiary is allowed, but not required, to take distributions prior to that date.
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