Cash (or checks) you normally don't have to pay federal income tax on. If you inherit an asset that generates its own $ (like a home or a 401k), then you usually have to pay tax on the income that the asset generates.
I did not have to pay taxes on any money I received from a trust but I don't know that this is true for everyone.
My parents had a joint revocable trust. When my dad died it became a sole revocable trust that my mother was sole owner of. When she died her trust split in to 2 trusts. One was owned by my brother and I owned the other. She had a very large IRA, you can't put an IRA in a trust. My brother and I split the IRA, both choosing 5 year pay out rather than lump sum pay out. We each had to pay taxes on what the payout each of those years. Taxes amounted to about a 1/3 of the payout each year.
Whether you have to pay on this might depend on whether you own the trust or just receive payout from it. I owned my trust so it was "my" money.
I think you should talk to an accountant or tax person to be certain because if you owe taxes on this and you don't pay they will come after you and then you'll owe the taxes, penalties and interest. I believe they can put a lien on your home and seize it too but I might be wrong about that.
This makes sense. I definitely just received a payout from a trust that was divided among a bunch of us (it was my grandfather's estate and there was one trust set up specifically for the many grandchildren).
I did some googling and asked some family members who all said we shouldn't need to pay taxes on the money, but I figured someone here may have some experience with something similar.