First, condolences on your loss.

I’m not a financial advisor or estate planner, but if this is truly a life insurance payout, it does not affect the estate or the executor of the will. A life insurance policy will operate directly between the insurance company and named beneficiaries once the company is aware of the death.

Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income and you don't have to report them. However, any interest you receive is taxable and you should report it as interest received. See Topic 403 for more information about interest. - Source