@heffner-sc wrote:
to be clear, I was not a Trustee, I was a successor Trustee, but without that role materializing, I was (I believe) simply a beneficiary) - does that change the tax liability you are suggesting. thanks ...
In general, the beneficiary of a deceased does not pay income tax on a cash inheritance. A trustee may be required to declare income received for services rendered.
I don't think we have a clear picture of why you were paid.
If the will said "$10,000 to each of my 5 children, with any leftovers going to Bob" then Bob is also a beneficiary, even if Bob is not a relative.
Or, suppose the will said, my trustees get 10% for management fees, and everything else is divided between my children Betty and Bob. The trustees decide 10% is too much, so they kick back some money to Bob but not Betty. That could be a gift from the trustees, or it could be part of the bequest, either way it's not taxable to Bob (although it might be improper for the trustees to favor one beneficiary over another).
If you performed no services as a trustee, I can't think of how this would be taxable, no matter what the real reason is for the payment. But you may need advice from your own hired professional who can review documents.
