If life insurance is divided up among children at time of mothers death, and not put "in estate", is it taxable or considered part of moms estate

If Mom left credit card debt and there are insurance policies divided among children, does the insurance money have to be used to pay these debts.

No, insurance proceeds go direct to the beneficiary and are not part of the estate. Nor is it taxable income.

One nuance, which is only of concern for very large estates (those that require filing of an estate tax return): if the mother was the owner of the life insurance policy then its value is included in the value of her estate for purposes of calculating estate tax. For example if she bought the policy and named the children as beneficiaries then she is the owner and the policies are included in her estate value. However - as ScottGem pointed out the payout from the policy goes directly to the beneficiaries, and so cannot be used to pay off her outstanding debts.