Often when a physician chooses aretirement destination, they considerthe climate, community, and perhapseven property taxes. Rarely doestate planning concerns come into play.With the 2001 Tax Relief Act, federalestate taxes were eased significantly.The law, however, also reduced tax revenuefrom flowing into states, a matterthat some states have taken into theirown hands. Before, when estate taxlaws were more unified, moving yourresidency and estate from one state toanother would hold no advantage. Thisisn't the case anymore. In New York, forexample, you can face a combined federaland state estate tax rate of 60%.Several states, such as New Jersey, RhodeIsland, and Wisconsin, have reduced theestate amount on which a resident canbe taxed to as little as $675,000. Thisamount is in the range of the averagephysician's estate. But don't pack yourbags yet, doctor. Estate planners advisethat there is no guarantee that a state'sestate tax laws will remain unchanged. Some advisors believe that if you arechoosing a state based on estate taxconcerns, states such as Florida, California,and Nevada are your best betsbecause they appear to have constitutionalprohibitions against breakingfrom the federal laws and establishingtheir own estate tax requirements.