If the beneficiary designated to the IRA custodian by the participant is not an individual and the participant had not yet reached the Required Beginning Date for RMDs, the 5-year rule applies; there is no option. Subsequent parceling out of the inherited IRA to an individual beneficiary does not change the fact that the estate was the beneficiary indicated by the participant and that the 5-year rule applies.
See Beneficiary not an individual in IRS Pub 590-B: https://www.irs.gov/pub/irs-pdf/p590b.pdf
