Life Insurance taxed?

How will a beneficiary be taxed(living in VA) when deceased dies in NC with assets in Bermuda? Deceased owned Life insurance policy that was optained in Canada. Proceeds do not go the the estate, however, estate will probably be well over 650,000 with life ins included. Any ideas on what to expect?
Thanks.

[This message has been edited by JC (edited November 19, 1999).]

There would be a lot of information needed, including citizenship and/or residence status of decedent, who the beneficiaries are (to the extent assets go to a spouse, it is not taxed) what the Will and Trust says about allocation of taxes, etc. But unless held in a qualifying life insurance trust, proceeds are taxable in the estate of decedent.

Thanks for the reply. When you say "allocation of taxes"...
Can the taxes be taken out of the life ins.
policy if the proceeds from policy are NOT payable to the the estate? Thanks!

Yes. The government doesn't care who they get the taxes from. A pro-rata is customary, but if there is a taxable estate, get a tax or estate planning lawyer involved ow, while the guy is alive and something might be done.