It depends but they will not have to pay any capital gains tax on the property if the property is inherited. They will just get a step-up in the basis to the fair market value (FMV) on the date of passing.
After your children inherit the rental property - they would only have to pay any capital gains taxes between the FMV on the date of inheritance and date of a future sale. (Also Inherited property always
qualifies for long-term capital gains treatment
(even if held for less than a year)).