Thanks. The person is from out of state and I live in MD.

Not likely, but there's a chance you might if you're in MD (the only state that does around here, assuming you live in the DCUM region).There's nothing at the federal level, but a handful of states tax inheritances.

https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/What-are-Inheritance-Taxes-/INF14800.html

http://www.nolo.com/legal-encyclopedia/maryland-inheritance-tax.html

The fact that the distribution came from a trust instead of directly from an estate may change things. Though on further reading, it appears, in MD's case anyway, that the estate handles the payment before the funds are distributed.

You don't have to pay taxes on it.
Dead relative's estate has to pay estate taxes on assets more than 3 million or so.

I was left 10k recently by a friend of the family. I have no idea when I will get the money or how it will all shake out with taxes. The person who left the money was an attorney and while taxes are covered, sort of, I don't quite understand it. Does it make a difference that it was a living trust that I received upon her death?