If you intend to leave all of your assets to your spouse, estate taxes aren't an issue: You can leave an unlimited amount of money to your spouse tax-free. Otherwise, your estate will owe taxes only if its value - including real estate, life insurance proceeds, retirement accounts and investments - exceeds a certain threshold, known as the estate tax exemption.
The estate tax was phased out completely in 2010, but is slated to return with an exemption of $1 million in 2011.
If your estate is large enough to trigger the estate tax, only the amount that exceeds the exemption will be taxed.
It's a good idea to consult a financial adviser if there's any chance your estate will be large enough to trigger taxes.