If an IRA customer (over 70 1/2) is deceased, and has not designated a beneficiary, what are the options? I am assuming the bene. is the Estate, but then does it get distributed to the Estate to be disbursed to the designated individuals through the will?

Yes, the estate is the beneficiary. Look at your plan documents, it should be stated in the plan. The account should be frozen pending contact by the estate representative. You might want to consider an alert message on the system to safeguard assets until the rep comes forward.

For death on or after Required Beginning Date:
No Beneficiary: Distributions over the IRA holder's remaining Single Life Expectancy, nonrecalculated, beginning December 31 of the year following the employee's death using the age of the employee in the year of death.

(I'm getting this out of an IRA seminar workbook, but it looks like they quoted straight out of the IRC... "employee" instead of "account holder" implies pension rules, but IRA rules are the same.)