"So far, everything is very clean it seem."
Except that it seems that there was no reason to deposit $1,000 of your own money into the estate account. That $1,000 should probably come back to you.
If your mother was the insured and the policy is paying the death benefit, there is no taxable income to pay to the beneficiaries, so no taxable income from this insurance payout to enter as Other income (Form 1041 line 😎 or to report on Schedules K-1. Only the taxable amount shown in box 2a of the From 1099-R would be entered as Other income. There would only be taxable income from this if the money earned interest while in the estate account.
