How to Pass Down Prized Jewelry, Art, and Cars  

In a world full of passing trends and fleeting fads, some individuals and families dedicate time, passion, and financial resources to selecting, curating, and preserving the finest examples of human creativity. Whether it’s a collection of old master paintings, a vintage automobile with a unique provenance, a precision-engineered timepiece, or an exquisite jewel, these treasures are more than mere objects—they’re an enduring expression of luxury. “Luxury beyond experiences and possessions is a state of mind, a lifestyle, a philosophy of living in the beauty, craft, and art that transcends cultures and time,” says Anne-Laure Colcy Versavau, Executive Vice President at Capgemini Invent Luxury sector. “It creates magical moments that tell stories and build a legacy.” 

Inspired by families of significant cultural influence, such as the Morgans, Rothschilds, and Gettys, contemporary collectors look to convey their legacy to future generations. As they contemplate the best ways to ensure these legacies endure, families might want to consider important factors such as the next generation’s desire and ability to care for their collections, the estate and income tax implications of passing them down, and strategies to mitigate the attendant challenges, both financial and practical. 

Do Heirs Even Want Your Collection? 

Collectors are passionate about their pursuits. They also tend to assume that their loved ones share their affection for their treasures. However, tastes vary, and trends come and go, so collectors are often disappointed to learn that their children and grandchildren lack the same enthusiasm—if they’re interested at all. 

Interest and enthusiasm aside, inheriting collections comes with significant carrying costs, including appraisals, insurance, storage, preservation, and security. (See “Practical Considerations” below.) For all these reasons, heirs might prefer inheriting the monetary value of a collection instead of the collection itself. The only way to know (and plan accordingly) is to ask the intended beneficiaries what they think. 

What Is Your Collection Worth? 

Effective planning for art and collectible assets is predicated on determining accurate fair market value of the collection. It differs from the retail replacement value used by the insurance industry. To determine fair market value, a qualified appraiser will consider the provenance and history of the object as well as recent sales of comparable objects and market conditions. For these reasons, it’s critical to maintain complete records. Of course, there are other pertinent factors for determining the value of different types of luxury items, including collectible cars and rare watches. 

Drive My Car 

“Cars are not only personal; they are also generational,” says Scott Swanson, Partner at Cerity Partners and car enthusiast. “Most collectors prefer cars made between the year they were born and the time they graduated from college.” This explains why the most in-demand collectible cars today are from the 1970s and 1980s—the era corresponding to the youth of collectors now in their 50s and 60s. Cars can be passed through a will or a revocable trust. For those heirs looking to monetize the assets, the good news is that the car market is highly efficient, liquid, and transparent. Swanson recommends leaning on specialized experts, such as Bohnams, RM Sotheby’s, Barrett-Jackson, Mecum, and online specialists BringATrailer for appraisals and price discovery. Cars of exceptional historical, cultural, or technological significance can also be donated to public or private museums with a 501(c) (3) status, such as the Petersen Automative Museum. To be eligible for donation, the automobile typically needs to be in excellent or original condition. A professional appraisal would be required in order to take advantage of any potential tax deduction. 

Inheritors wishing to hold on to collectible cars should be reassured that carrying costs can be relatively modest. Insurance is often inexpensive because policy issuers know that a collectible car spends more of its time in a garage or on a trailer than on the road. In fact, storage is typically the biggest ownership expense. Maintenance costs differ greatly depending on the car make, year of production, and maintenance history. Swanson recommends contacting local automative clubs for best practices, recommendations, and the community of fellow enthusiasts. 

Time Made Eternal 

Watches and jewelry are prized as commemorations of special moments and heirlooms that seemingly transcend time. Diamonds are famously “forever,” and as an award-winning Generations campaign from Patek Philippe memorably said, “You never truly own a Patek Philippe; you merely look after it for the next generation.”

“There are few things on Earth made by humans that are designed to last an eternity,” says Paul Boutros, Deputy Chairman and Head of Watches, Americas, at Phillips. “It’s no wonder that rare watches and fine jewelry are heirlooms passed down from generation to generation.” Beyond their intrinsic rarity, some of these items are especially valuable because of their provenance or because they bear a famous maker’s name, like Cartier, Boucheron, and Tiffany for jewelry and Audemars Piguet and Vacheron Constantin for timepieces.   

“The very best collectible watches command values that tend to rise over time,” adds Boutros. “In the late 1960s and 1970s, a stainless-steel Rolex Daytona with a ‘Paul Newman’-style dial had a retail price of around $200. Today, that watch can command anywhere from $300,000 to $600,000 or more.” 

Both collectors and inheritors are encouraged to rely on qualified independent appraisers, authorized dealers, and reputable auction houses for fair-market appraisals. Importantly, while dollars and cents matter, sentimental value can trump all when it comes to rare watches, fine jewelry, and collectible cars. 

Keeping the Collection in the Family  

If heirs want to retain their parents’ luxury collections, it’s imperative to work with trusted advisors who have experience and extensive professional networks in the arts. Fluctuating value, emotional significance, and the illiquid nature of fine art and collectible assets make planning for their conveyance a complex, multidisciplinary effort. At Cerity Partners, we take a team approach, assembling in-house specialists in insurance and risk management, tax planning and preparation, and estate planning. 

“Works of fine art and collectibles are considered personal tangible property,” says Paul Chmielewski, Partner and Head of Centralized Estate Planning at Cerity Partners. “They pass according to dispositive provisions of a will, revocable trust, or a dynasty trust and, unless gifted during life, are included in the taxable estate, which can lead to a significant tax burden for heirs.” In 2025, the Federal estate tax is 40% for assets in excess of $13,990,000; applicable state and local estate taxes vary.  

Where lifetime transfer is appropriate, advanced gifting techniques, such as family limited partnerships, limited liability companies, and grantor-retained annuity trusts can minimize transfer taxes. While multiple family members can benefit from both the enjoyment of art and its disposition, there are practical aspects to consider. The family might want to appoint an entity manager and create agreements governing how the asset will be shared or rented—and how any proceeds from the asset’s use might be divided. Finally, the estate tax benefits achieved from lifetime gifts must be balanced against the loss in step-up in basis for income tax purposes.  A step-up, a valuable tax provision that adjusts the cost basis of an asset to its fair-market value on the date of the previous owner’s death, can reduce or even eliminate the heirs’ capital gain tax lability if the asset value increases. 

A much simpler – and therefore popular – strategy is using one’s annual exclusion amount ($19,000 for individuals, and $38,000 for married couples in 2025) to gift fractional ownership in works of art to children and grandchildren.    

Tips for Deaccessioning a Collection 

For collections or pieces that don’t have willing and able family stewards, a bequest to a public or private museum might be a better option. Gifting these assets may confer significant tax benefits while sharing them with appreciative audiences. However, donating isn’t always straightforward. Just because you want to donate a collection doesn’t mean that a museum or other potential recipient has the capacity, funds, or interest in acquiring it. Additionally, donations must satisfy specific requirements to realize these tax benefits and take careful planning, including negotiating display, storage, and disposition provisions.  

Selling art outright during one’s lifetime may sound like the simpler solution, but such a sale could result in significant income tax liability. Works of art held for more than one year are taxed at the special collectibles capital gain tax rate of 28% in addition to potential state and local taxes. A more advantageous way to sell the art is to leave it to one’s heirs to do. When art is sold shortly after death, heirs benefit from the step-up in income tax basis.  

Timing, however, still merits careful consideration. If a collection focuses on just one or a few artists (or a specific genre, maker, or type of precious object), selling the entire collection at once might flood the market, depressing the sale prices those pieces command. Waiting, of course, has its own costs. If insurance, restoration, and storage fees are burdensome, borrowing against the collection can be an effective planning tool, providing liquidity in an otherwise illiquid estate. 

Properly Passing Down a Collection and Legacy 

Planning around art and collectible wealth is not a trivial matter. It takes intention, dedication, a coordinated team of professionals, and significant funds. However, that planning can be especially rewarding because it ensures that meaningful objects, with all the passion and joy they inspired, live on as part of one’s legacy. At Cerity Partners, our financial advisors can draw on our deep bench of specialists to set up a plan for your collection. We would be honored to help pass on your legacy. 

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