How to Soften the Blow of Estate Taxes
METAXAS: A rough week for the euro, Europe's chief currency. The people of Denmark rejected a proposal to adopt it. That move puts the euro's future in doubt. In recent weeks, many U.S. companies have cited the weak euro for weaker profits. But the picture is not all bleak, especially if you're planning to visit Europe. Valerie Morris shows us how the euro's loss could be your gain.</s>VALERIE MORRIS, CNN CORRESPONDENT (voice-over): It's the tumble that has a lot of people concerned. The euro, Europe's chief currency, has tumbled nearly 30 percent since its debut in January of last year. And most experts believe it will fall further.</s>TOM BENFER, VICE PRESIDENT, BANK OF MONTREAL: We can still hit levels of 82 to 83 for the euro. Some people are even talking 80. But I think in the low 80s. There's still possible room for moving down in the euro.</s>MORRIS: What's behind all this? In part, the booming U.S. economy. Its rapid expansion is luring international companies to pour their money onto these shores and dump the euro. Even though the U.S., Japan, and Canada are intervening to stabilize the euro, American consumers can still benefit. Your dollar buys anywhere between 10 to 15 percent more in euro markets than it does in the United States. Before you start packing, keep these things in mind.</s>HEIDI SHERMAN, ASSOCIATE EDITOR, "TRAVEL AND LEISURE" MAGAZINE: Make sure that you pay with everything that you can with your credit cards, since the major banks get the best exchange rates. Also, if you can, get your travelers' checks, because you're going to get obviously a better exchange rate, and there the currency isn't available yet, the travelers' checks are. And lastly, don't book a package tour that you pay in advance for, because if the euro continues to slide, which the European Central Bank thinks it might, you're going to lose money.</s>MORRIS: So if you're planning on a trip overseas, a wealth of bargains is waiting for your wallet. That's YOUR MONEY. I'm Valerie Morris, CNN Financial News, New York.</s>METAXAS: Currency concerns are not the only worries in Washington. Estate taxes continue to be a topic of debate. Earlier this month, the House of Representatives failed to override President Clinton's veto of the repeal of the estate tax. But with or without repeal, Lauren Thierry examines one interesting strategy land owners can use to soften the blow of estate and other taxes while protecting their land.</s>LAUREN THIERRY, CNN CORRESPONDENT (voice-over): Land conservation is important to Allan Shope, so important he signed a conservation easement for property he owns in Duchess County, New York. A conservation easement is a legal agreement between a landowner and a land trust. It permanently limits uses of the land in order to protect its conservation values.</s>ALLAN SHOPE: My agreement for this piece of property limits the number of houses that can be built on this property to roughly one house per 125 acres.</s>THIERRY: While conservation easements serve to protect land and wildlife habitats, they can also serve as big tax benefits to landowners. For instance, the value of an easement can be treated as a charitable gift and be deducted from income tax.</s>MARTIN KAPLAN, CERTIFIED PUBLIC ACCOUNTANT, GELLER, MARZANO: The easement restricts the usages of the land, which means the best use, which might be, for example, to build houses, it can no longer be used for that. So the land, by having it appraised, is now worth far less.</s>THIERRY: So if a property is worth $500,000 unrestricted, and an easement placed on it lowers its value to $200,000, the value of the tax deductible donation is $300,000. In addition, an easement can lower annual property taxes, since the fair market value of the land has been reduced. And a reduction in land value can translate into significantly reduced estate taxes.</s>BECKY THORNTON, EXECUTIVE DIRECTOR, DUCHESS LAND CONSERVANCY: A landowner, you know, unless they're audited by the IRS, you know, they just file their tax return, they have -- we guide them through the process of getting an appraiser who does the valuation for their tax deduction. And, you know, unless they're audited by the IRS, it's a pretty smooth process.</s>THIERRY: Each easement is tailor made to fit the landowner and their land. Therefore it's important to have a lawyer review an easement before you sign it. To find a land trust in your area, call the Land Trust Alliance at 202-638-4725. Or visit their Web site, www.lta.com. That's YOUR MONEY. Lauren Thierry, CNN Financial News, New York.</s>METAXAS: Up next, free expert advice. Financial planner Debra Morrison joins us to answer your personal finance questions. And forgot to pack your rubber duck? Don't worry, we'll tell you about some hotels that are going out of their way to make you feel at home. Ahead on YOUR MONEY.