"my husband's trust" - covers a lot of ground and doesn't provide any indication of what type of trust it is which would be required to reach a final conclusion.

"she...sold the home" - do you really mean the Trust sold the home?  Presumably she cannot sell something that she doesn't own.

1.121-1(c)(3) governs when trusts can take the 121 exclusion - it boils down to grantor trusts.  No knowing the actual facts regarding this trust, hard to comment further.