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The $10 Million Hermès Problem: Estate Planning When Luxury Collectibles Outpace the Art Market

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New York Observer 

When a Hermès Birkin bag fetched a record $10 million at Sotheby’s over the summer, it didn’t just make headlines—it served as a reminder that seven-figure prices are no longer confined to fine art. Other collectible assets have shown an equally dynamic, often faster-growing market in recent years, even as they remain largely overlooked in estate planning and collection management.

Granted, the record-setting Birkin was exceptional as a one-of-a-kind piece—made for Jane Birkin in 1985, identifiable by her initials “J.B.” on the flap and the nail clipper tucked inside the zipper—but prices for Hermès’ iconic bag have been rising sharply across both auction and retail markets. Over the past decade, Birkin prices have increased by roughly 35 percent, with most of that growth coming post-pandemic. In May 2025, U.S. prices rose another 4.4 to 6.4 percent due to new tariffs, while European hikes averaged 4.3 percent.

As of 2025, a Birkin 25 sells for $12,700 in the U.S. (€8,950 in Europe) and $13,900 for a Birkin 30 (€9,800 in Europe)—figures that rival what one might pay for a contemporary painting on the primary or secondary market. When the Birkin debuted in 1984, it cost about $2,000, meaning prices have climbed at an average annual rate of 4 to 6 percent. Now, especially after tariffs, that pace is accelerating—outpacing even gold. At auction, Birkins typically achieve 2.4 times their retail price, a multiple that continues to edge upward. The driver behind this surge is genuine scarcity, built on both craftsmanship and exclusivity: buyers can’t simply walk into a Hermès store and purchase one. Prospective owners face lengthy waiting lists, with production still capped at roughly 70,000 bags per year, according to analysts.

The Birkin, however, is only the most visible symbol of a broader rise in alternative collectibles and luxury assets at auction. While the global luxury goods market contracted by 2 percent in 2024, luxury at auction shows no such slowdown. The 23rd edition of Bain & Company’s annual Luxury Study, produced with Fondazione Altagamma, estimated the resale luxury-goods market at €48 billion in 2024, up 7 percent year over year.

The recently released 2025 Deloitte Private & ArtTactic survey confirmed that luxury collectibles are now one of the fastest-growing segments in the auction world, reflecting a broader shift toward tangible, lifestyle-driven assets. The survey found that in 2024, luxury categories accounted for a decade-high 18.8 percent of total sales at Christie’s, Sotheby’s and Phillips—despite a 19.7 percent drop in overall sales value. The momentum carried into 2025: in the first half of the year, luxury collectibles represented 20.2 percent of total auction sales by value, even as the broader auction market fell 26 percent.

Both reports point to the same underlying factor: secondhand luxury offers an accessible entry point for aspirational buyers who can’t yet afford new pieces but want to begin collecting. Millennials and Gen Z are driving this shift, as confirmed by Art Basel and UBS’s 2025 Report on Global Collecting, which found younger collectors dominating categories such as handbags, sneakers and luxury accessories—with average sneaker spending nearly five times higher than that of older age groups.

Both Art Basel and UBS and Bain’s study further note that “hard luxury”—watches and jewelry—remains the most active category, accounting for 80 to 85 percent of total sales. The global jewelry auction market, valued at $3.2 billion in 2024, is projected to reach $6.6 billion by 2031, growing at an annual rate of 11 percent. Jewelry sales at Christie’s rose 25 percent year over year as of July, cementing the segment as a key revenue driver during softer fine-art cycles.

At Christie’s “Magnificent Jewels” auction in New York (June 17, 2025), total sales reached $87.7 million, with 100 percent of lots sold. The top lot was a 10.38-carat fancy purple-pink diamond ring by JAR, which sold for about $13.98 million, setting a world auction record for a fancy purple-pink diamond. And while such rare colored diamonds continue to dominate headlines, other jewelry is also in high demand—and as demand grows, so do prices. The resale value of Rolex watches, long a benchmark for collectible timepieces, climbed from $2,050 in 2010 to roughly $13,426 by mid-2025, according to Bob’s Watches.

Meanwhile, the market for rare spirits and vintage wines has also surged. The Economist recently reported that although per-capita alcohol consumption is falling across most Western markets—driven largely by Gen Z’s “soft-clubbing” habits—the fine wine and spirits sector has remained stable, holding steady at around €99 billion in sales at current exchange rates. People may be drinking less, but when they buy, they’re trading up, focusing on higher-end bottles that function less as beverages and more as alternative assets. The Spirits Market Journal’s index of collectible whiskies rose 5 percent from April 2025, marking the strongest gain in three years.

Auction results underscore this momentum. Sotheby’s charity sale “Distillers One of One,” held on October 10 at Hopetoun House near Edinburgh, set 30 new whisky records, led by the Glenlivet SPIRA 1965 60-Year-Old, which sold for $693,682—a house record for the distillery. The biennial event featured 39 unrepeatable lots of rare bottles, casks and bespoke experiences. Roughly 200 guests attended in person, with additional bidders joining by phone and online. The auction totaled $3.9 million, including buyers’ premiums, with a hammer total of $3.1 million donated to the Youth Action Fund to support training and education programs in Scotland. The record for the most expensive whisky still belongs to the Valerio Adam 60-Year-Old from The Macallan Distillery, sold by Sotheby’s in November 2023 for $2.9 million (£2.2 million), nearly double its high estimate.

In the wine world, the Setting Wines 2019 Cabernet Sauvignon (6 liters) holds the record for the most expensive wine ever sold at auction, achieving $1 million in November 2021 at the Emeril Lagasse Foundation charity sale. Previously, Sotheby’s set the benchmark with a 1945 Domaine de la Romanée-Conti, which fetched $558,000 (£422,801; €481,976) including premium at Sotheby’s New York on October 13, 2018—17 times its original $32,000 estimate.

A magnum of Avenue Foch 2017 Champagne also made headlines in July 2022 when it sold for $2.5 million, setting a record for an “all-wine bottle” sale once its special packaging and digital rights were included. Created in collaboration between artist Mig (of Bored Ape Yacht Club fame) and investor Shammi Shinh, the bottle featured Mig’s Mutant Ape artwork and an NFT granting its buyers—Italian brothers Giovanni and Piero Buono—the digital art and intellectual property rights to the design.

In May, Christie’s launched Luxury Week in Hong Kong with “Iconic Wines from Joseph Lau Part III” at The Henderson, achieving HK$72.89 million ($9.35 million) and a 200 percent hammer above the low estimate. The top lot—10 bottles of Henri Jayer, Vosne-Romanée Cros Parantoux 1999—sold for HK$3.25 million ($416,865), triple the low estimate. Millennials accounted for 55 percent of new buyers and over 40 percent bid online. In June, the auction house sold the once-in-a-generation collection from renowned collector William I. “Bill” Koch, achieving $28.8 million and setting a record as the largest single-owner wine collection ever sold in North America. The top price was reached by a 1999 Domaine de la Romanée-Conti, Romanée-Conti, which fetched $275,000, followed closely by three magnums of the same vintage that realized $237,500—more than twice their high estimate. Most recently, in September, the two-day single-owner sale “The Glorious Cellar of a European Connoisseur” confirmed the strong momentum for wine in the U.S. market, bringing in nearly $3.5 million with 93 percent sold by lot. The top price was achieved by a magnum of Domaine de la Romanée-Conti, Romanée-Conti Grand Cru 2005, which realized $68,750.

Also this September, Sotheby’s closed another white-glove wine sale in Hong Kong, auctioning the cellar of property tycoon Albert Yeung Sau-shing for HK$17.66 million ($2.26 million) across 426 bottles. The top lot—a set of three magnums of Romanée-Conti 1997 from Domaine de la Romanée-Conti—sold for HK$625,000 (about $80,000).

But it’s not only luxury collectibles that have seen a notable rise—sports memorabilia and other nostalgia-driven assets, such as Pokémon cards, have also developed an active and increasingly liquid market across both traditional auction houses and online platforms. Last April, a jersey worn by Kobe Bryant during his 1996-97 rookie season with the Los Angeles Lakers sold for $7 million at Sotheby’s, setting a record for an item owned by the basketball legend. In October, Christie’s “American Greats: Vintage Sports and Hollywood” sale, held in partnership with Hunt Auctions, achieved $8.428 million across more than 400 lots, led by a 1939 jersey worn by Lou Gehrig in his final game, which fetched $2.712 million—a world record for Gehrig-related memorabilia. Meanwhile, the 1998 promo Pikachu Illustrator card (graded PSA 10) reached $5.275 million in a private sale, setting a benchmark for Pokémon TCG values as the market for the cards continues to grow in both volume and price. In March 2022, Heritage Auctions sold a 1999 First Edition Holographic Charizard (PSA 10)—the iconic chase card—for $420,000. Another sold earlier this year for $175,000. These numbers confirm that sports artifacts and nostalgia collectibles are no longer merely fan trophies—they’ve evolved into alternative assets with significant financial potential.

Luxury owners, think ahead

Across most categories, the true rise in value remains concentrated around ultra-rare pieces, strong heritage brands, limited editions and items with star provenance. Rarity, condition and history dictate everything here—as Jane Birkin’s own bag so perfectly proved. Yet when it comes to estate planning, insurance and tax appraisals, collectors can no longer ignore that the luxury items they’ve owned for years may now be worth far more than what they paid—often exceeding the art they’ve collected over the same period. Overlooking these revalued assets, from watches to rare wines, can lead to costly probate disputes, surprise tax bills and family tensions if not properly documented.

Jessica Wessel, head of business development at the art advisory and appraisal firm Gurr Johns, confirmed that these categories are increasingly under review when managing extensive estates and collections. “Collecting takes many forms and increasingly we are seeing collectors broadening their focus to include luxury items like handbags and other accessories, as well as sports and entertainment memorabilia,” she told Observer. “The value and markets for these items fluctuate depending on quality, rarity and demand so we encourage clients to maintain detailed inventories and records to plan for and protect their valuables properly.”

According to the 2025 Deloitte Private & ArtTactic survey of wealth managers and family offices, a notable share of client wealth is tied to art and collectibles, with averages of 10.3 percent for wealth managers, 10.9 percent for private banks and 8.8 percent for family offices. As the report notes, wealth managers should treat this as an invitation to expand their art and finance strategies beyond paintings and antiques to include luxury collectibles and personal luxury items. The same services—valuation, succession planning and strategic gifting—apply to these “passion assets,” which can also strengthen client relationships by linking lifestyle and legacy.

“Given that auction houses have been stepping up their sales of high-value luxury goods—handbags, watches, wine—and that those sales are making big headlines, clients are more aware than ever of their value,” said Mari-Claudia Jimenez, an industry veteran now heading Withers’s new Art Advisory division, told Observer. Still, she noted, clients often fail to consider these possessions when doing estate planning because they don’t see them as investments. “They think of them as passion purchases—things they wear or use—so they don’t categorize them in the same way.”

Jimenez and her team regularly remind clients that these objects, whether or not they were bought as investments, often appreciate or at least retain significant value—and therefore deserve a place in an estate plan. “We see clients who view their art and collectibles as expensive décor, not realizing that some are valuable enough to require a plan for how to sell or gift them after death,” she said.

Her top advice: schedule regular appraisals. For clients whose collections span multiple categories, she recommends working directly with an auction house. “Because of the breadth of their expertise and departments, they’re often best equipped to do a comprehensive appraisal of a client’s art, collectibles and luxury items,” she explained. “Once a specialist walks through the home, sees what the client lives with and asks a few focused questions, they can immediately identify which objects are stores of value and which are ‘worthy’ of a formal appraisal. From my experience, it’s only when clients see, in writing, the actual value of what they own that their mindset—and their estate planning—truly changes.”

Digital tools for collection management

“Whether it’s a $10 million handbag or a $1,000 watch, the most common issue we see is a misaligned expectation of value, either overestimated or underestimated. Families often rely on outdated appraisals and miss fluctuations in value for items that have appreciated or depreciated since the last valuation,” said Emily A. Thompson, senior director of fine art at Winston Artory Group, which, after a recent merger, now offers an integrated service of art appraisal, blockchain technology and collection management—allowing collectors to record and tokenize their holdings with all related information.

Establishing and maintaining value starts with record-keeping and proper stewardship, Thompson emphasized. “Every item should have a current appraisal supported by clear documentation and current scholarship, in addition to condition notes. For handbags and other luxury goods, details such as the original packaging, receipts and materials can be critical for both valuation and estate planning.” For example, the material of a handbag—whether black box leather or an exotic skin such as crocodile or lizard—can significantly influence both market value and the regulatory requirements surrounding ownership and transfer.

For this reason, Winston Artory Group now offers a system that documents, values and tracks clients’ collectible assets across categories, helping them plan appropriately with their estate attorneys, insurance providers and advisors. “Regular reviews, both for fair market value and replacement value, ensure accurate reporting, minimize disputes and mitigate risk across the entire collection,” Thompson added.

“We often see luxury assets like handbags, watches and jewelry overlooked in estate or tax planning, yet their value and personal significance can be immense,” said Tom Burns, COO of Fortress Storage, which since 1983 has been a leading company setting the standard for private storage and handling of fine art, collectibles, furniture and luxury possessions. Unlike the art world, there’s no provenance registry or Art Loss database for handbags, making proper documentation, insurance and estate planning essential, Burns added. “We work closely with clients to catalog and secure these pieces, particularly during family transitions, moves or renovations, when they’re most vulnerable,” he said. “Taking the proper planning steps and observing best practices for storing and caring for these items not only helps avoid disputes and unexpected liabilities, but also increases their value and ensures generations can appreciate them.”

“It’s a matter of organization and awareness—making sure you’re keeping proper documentation for authentication,” said Howard Enders, COO of The Estate Registry and an estate planning expert with more than 20 years of experience. “When you’re talking about valuables or collectibles, having the original receipt is key to proving ownership. Yet many people no longer know where those documents are. They weren’t always stored safely or in a central location, one that could also be easily accessed by their heirs once they’re gone.”

When estates are settled without proper records or appraisals, those pieces can easily be undervalued, creating tax complications for beneficiaries, he noted. “They need to know what the actual basis or current value is—but also have the documents to prove it,” Enders explained. That’s where digital vaults come in—platforms such as The Estate Registry and other specialized software designed for the management of collectibles. “They let you upload and store everything securely—receipts, appraisals, ownership records—all in one place. It’s much easier to keep things organized, whether you’re updating a trust or managing an estate plan,” he said, emphasizing the advantage of having a single digital database for all documentation.

The need is growing as the IRS broadens its focus beyond traditional assets. “It’s not just art, jewelry or gold anymore—they’re also looking at handbags, whiskey and fine wine,” Enders noted. “It used to be mostly wealthy collectors, but now many more people own valuable items without realizing the implications. I know people with huge wine or whiskey collections sitting in storage, never checking current values or updating photos. That’s risky.”

Regular documentation and valuation, Enders noted, are becoming essential parts of responsible collection management. Digital vault systems make the above-board management of both physical and digital assets far easier—and not only for collectibles. They also allow users to store passwords and access keys, which are crucial for managing digital assets such as cryptocurrencies, as well as online banking or investment accounts. “Products like ours provide that structure,” Enders said. “They help clients securely record, value and pass on not just collectibles or hard assets, but digital ones too.”

Notably, these platforms do more than consolidate data—they now enable owners to specify who should receive each asset and who should have access to the necessary information to manage it, a key element in proper estate planning. “Trying to track down receipts or ownership details buried in someone’s email after they’ve passed is often nearly impossible,” Enders said. “With these digital databases, one can link information directly to the asset—uploading documentation, provenance or even personal notes about why a particular piece matters. This preserves both the financial and sentimental value, something traditional methods of recordkeeping don’t do that well.”

For collectors, that clarity extends beyond inheritance. “It’s both about proper storage and management,” Enders explained. “If you want to transfer everything into a trust and record the real value, the vault gives you a reliable way to do that. And it’s just as useful for resale.” That’s why today these digital databases are becoming indispensable tools for fiduciaries, estate attorneys and wealth managers tasked with handling increasingly complex collections.

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