When you inherit money from a trust, it means that you are a beneficiary of the trust.
The trustee is responsible for distributing the assets of the trust to the beneficiaries according to the terms of the trust.
Depending on the terms of the trust, you may receive a lump sum of money, regular distributions over time, or some other arrangement.
One of the benefits of inheriting money from a trust is that it is usually not subject to probate.
The legal procedure for managing a decedent’s estate is known as probate.
It can be a lengthy and expensive process, and assets that go through probate are subject to court fees and taxes.
Because a trust is a separate legal entity, the assets held in the trust are not subject to probate.
However, inheriting money from a trust does not necessarily mean that you will not owe taxes.
Depending on the type of trust and the size of the inheritance, you may be subject to federal and state estate taxes.