My mother passed away 2 months ago and what Im wondering about is her 401K. My oldest sister doesn't want to touch it just in case there is something they try to come after us for which I highly doubt but that's beyond the point. What my question is, Is there a statute of limitations how how long we have to take the money before whomever takes the money if unclaimed takes it? Thank you in advance for all the help!

I do not understand what you mean about "unclaimed" taking the funds - please clarify. Also - if your mother died 2 years ago the executor of her estate should have notified the 401(k) plan administrator by now. If that hasn't happened, you should do so ASAP.

Assuming that you and your sister have each inherited 50% of your mother's 401(k), the best option is to setup an "inherited IRA" and then roll your portion of the account into it. You can so this transfer tax free, and then it can continue to grow in value tax-deferred. This must be a direct rollover - you can not take a cash distribution from your mother's 401(k) and then put it into a traditional IRA. I suggest you talk with customer service at one of the major investment houses (Fidelity, Vanguard, T. Rowe price, Schwab, etc) to find out the details of the process.

The law on this changed back in 2006 - prior to that you would have been required to take a distribution and pay the taxes.

You can also take a withdrawal, but you would have to pay taxes on it, and then you will be required to continue to withdraw a minimum amount each year, even though you are not retirement age.