I am so sorry for you loss and for your situation.  I think that you need to seek help from someone in the area that can look at the paperwork involved and can let you know what the tax consequences are on top of the other issues you have here.  If the money is used to pay the debt of the estate - which the funeral is the primary debt of the estate - I wonder if you can have your wife appointed as the personal representative of the estate, refuse the distribution and ask that it be made payable to the estate, and then pay the funeral expenses and be done with it. Or work it in some way that the money is paid to the estate to pay the debt without liability to your wife.  But you really need someone in the area who can look at everything that is at stake.  Get help.  Good luck.