The 5-year rule is an option only if the deceased died prior to his Required Beginning Date for RMDs, April 1 of the year following the year he reached, or would have reached, age 70½.
Note that option 3 is not a rollover. It must be a nonreportable trustee-to-trustee transfer. A trustee-to-trustee transfer to an inherited IRA is also necessary for option 2.
