Does a gift trust have a special tax to the beneficiary and does that affect what our listed taxable wages are when it comes to applying for income based benefits?

I have a full time career with paid benefits and retirement.  My wife is currently going to school and her grandmother set aside a gift trust for her.  The trust matured in 2016 but we were thinking of liquidating the account for bills.  I don't make a lot and the amount in there 11,500, would greatly help credit cards and medical bills we're behind on.  My daughter gets help with her healthcare through healthnet, and they ask for your income.  We get help because my yearly salary is under a set amount.

If we pulled that money out, would I file them for 2016, since that's when it matured, or 2017 taxes?  Also, are they taxed at a different rate or does that amount get taxed at our income amount? Lastly, does that income count as a taxable wage income, for when we reapply for her health benefits, or is it a separate type of income that we can show was a one time gifted amount?


Just concerned because I want to know if we liquidate the money, how much to keep aside for taxes, and how that will affect my daughters health benefits because of our income.  Can't afford 550 a month extra just for health care costs, so I want to prepare.