I would lean to B, especially if you could clear up/pay off a debt (then you’d be increasing your snow ball month to month which will ultimately help #4) Can’t remember, what’s your outstanding debt w/o mortgage and payday loan (LendMe1000 site)?
If your BEF is the size is should be an where you feel comfortable, I’d skip. HOWEVER, if you have nothing in retirement, for example, I could be sway in this investing in an IRA.
I like #4, but if you can kill the debt entirely, this will help this area.
Let us know what you guys decide. So happy that the money is indeed yours to keep. Despite the fact that you had to pay it in the first place, it’s so nice you have it back as one lump sum. It feels so different when it’s a big chunk instead instead of small payments.