For both legal and family interests - Handling Estate Issues for Fine Jewelry

Jewelry left in one’s estate usually requires thoughtful examination by an expert to determine value (or lack thereof) for disposition to heirs, taxation or just plain curiosity from family members. Even if previous documentation is available, it was probably prepared for insurance purposes, not fair market value, as used for estates. For large estates where items have significant value, written appraisals should be provided with the same depth as those prepared for insurance purposes.
But, unlike insurance requirements, more abbreviated documents may also serve the estate, providing essentials for identification and value, photographs and a signed document. We often advise this shortened format since it still provides sufficient information for probate and declaration purposes while saving the client money in the process.
In some cases, where a signed document is not required an informal consultation may suffice, where we examine articles and sort out those of value. The client receives the essential information verbally and may take notes that can be shared with the interested parties. We often recommend this route when there are a high number of costume and lower valued items, not contributing significantly to the estate.
Whenever representing an estate, make sure to state that purpose to the appraiser so articles are properly prepared at fair market value. This represents a hypothetical sale price in the market most appropriate for that article and may vary considerably from a retail value done for insurance replacement purposes. There is no set ratio to arrive at fair market value from retail. It depends on the article, its marketability and condition, with each piece being considered on an individual basis.
As more and more baby boomers are now dealing with the estates of their parents, a much greater proportion of our business is for such purposes. NGL continues to offer consultation for the best course of action in an individual case—whether documenting a multimillion dollar estate or giving descendants an idea of what Mom left in all those shoe boxes.

Larger Diamonds Need Updated Apraisals Now!

Our recommendation of updating fine jewelry appraisals every five years or “When your insurance agent bugs you” is currently revised for clients with diamonds of two carats and larger. See us now!

The jewelers’ cost for most two carat diamonds has risen 20- 40% in the past three years. Lower profit margins and fierce industry competition have left the retail “cushion” of two to three year-old appraisals painfully thin for replacement. For once the market is threatening
the mark-up.
Updating an NGL appraisal runs $20. Provide our original documentation for a current value revision and free inspection. Newly appraised items are based upon size and complexity
with rings sporting a 2 carat center stone starting at $95 by appointment.

Support your local jeweler (Op-ed with Ted)

I find it amazing how little confidence some consumers have in their traditional home town
jewelers fearing big retail mark-ups, while being perfectly willing to hand over their money to strangers on the internet or television.
True, having a physical store for you to shop in and hold actual merchandise carries more overhead than a virtual store, but what most consumers don’t realize is that many of the on-line and on-tube stores aren’t always saving you money. In many cases you are getting ripped off.
Before I alienate the legitimate virtual jewelers, let me say that there are some. The legit sites tend to offer GIA and AGS laboratory certificates on their diamonds and have a reasonable return policies. When the seller has a restrictive or no return policy, avoid them. If you are buying from an individual, maintain similar options, but remember most internet jewelry is being offered by dealers whether they represent themselves as such or not. E-bay transactions are notorious for misrepresentations often backed by fraudulent documents.
So, why not include your local bricks and mortar jeweler when price shopping with other sources? Many who buy loose stones elsewhere, end up at their local jeweler to set it, so give them an opportunity to provide it as well You may be pleasantly surprised with their response.
Wherever you buy, make sure your selected appraiser (that would be us) checks out your purchase and provides documentation for insurance.

Fun with inclusions - Being a laboratory gemologist isn't always boring

It isn’t only work, work, work at the lab. Sometimes we “play” with the stuff we are appraising by photographing neat inclusions - especially the ones that look like something interesting, like
birds, Abe Lincoln an so on.
We, of course photograph a lot of specimen inclusions for classroom use and the occasional
“doesn’t that look just like a…” formation. Sometimes the inclusions aren’t anything special by themselves, but when reflected off of other facets become more interesting. For instance, take a
look the feather we photographed in a diamond the other day. Oriented in the center of the stone near the culet, it reflects into a pattern resembling a palm tree. Or fireworks. Cool, huh?
With the release of Photoatlas of Inclusions in Gemstones , Vol. 2, John Koivula/Edward Gübelin we have another fabulous collection of microphotographs that aid in identification, show the beauty in crystals and are just plain fun to look at. It’s books like these (with the last in the series due in ‘07) that showcase gemstones - not the jewelry they often become part of and keep our profession interesting.

Don't Confuse the Word "Laboratory" with "Legitimate"

Independent gemological laboratory. Sounds authoritative, even clinical (why do you think we use it?). We see a lot of “laboratory certified” jewelry and loose stones but not often enough accurate descriptions. And, while we have reported on bogus labs for years it still is aggravates us to see the blatant misrepresentations made all the more prevalent by the internet.
In 2006, the most outrageous cases have involved represented retails at levels several times reality and grading of diamonds that can only be viewed as fraudulent. Still, many buyers blissfully accept any representation they are given and find out the truth far too late to do anything about it.
So the trusting often get ripped off and the skeptical come to see us. Each year, a bigger portion of our business is in verifying or refuting prior documentation. All too often, that representation is wrong, even if by a reputable sounding laboratory.
Most gemological laboratories have a threeletter call sign, like GIA, AGS or NGL and it can be confusing to the consumer who are the good guys and who are not. If they all sound the same, and their documents often do look the same, it’s thought they must be equal. Unfortunately, we even see labs with good looking websites touting their expertise while presenting bad paper on diamonds
and jewelry.
It pays to investigate the reputation of the lab doing the gemological documents for your gem or
jewelry purchase. Are they well-regarded within the industry, referred by others or only seen only in internet transactions. As mentioned in this year's op-ed article, always have the right
to return merchandise and have your own (well-researched) appraiser look at the article in question before keeping it.

The re-occurring case of the disappearing Rolex

Watches can be the easiest or hardest jewelry to appraise. Take, for example, the price of a current Rolex model that a simple phone call or catalog check reveals – pretty easy. But take another Rolex example – one that is discontinued and therefore unavailable new in an insurance replacement scenario. What are our options? Well, usually we research the used watch markets for a same model replacement in a secondary market approach. With a plethora of internet sources, we can see the availability of a certain model, recent transactions and current dealer or auction offerings. We weigh this with retail estate department prices and arrive at a fair value for insurance purposes. This methodology needs to be referenced on the document as being comparable through the secondary market.
For Rolex watches, there are comparables for many, many models, but available too are those with non-Rolex modifications. There are companies that specialize in making diamond bezels and dials that “customize” one’s Rolex. That not only voids the Rolex warranty and their further servicing of the watch, it changes the market value. While many people (and some appraisers) think that adding an aftermarket diamond bezel to a Rolex wristwatch enhances its “value” the opposite may be true. Take a look at offerings in the marketplace and the original un “enhanced” model may sell for the same as one with an added bezel bearing two carats of diamonds. A diamond bezel that’s original from Rolex however, is a different story so one must make sure to find the proper comparables.
Rolex has also replaced many models with slightly different ones, again leaving an appraiser without an exact replacement option. Using a closest available model approach identifies a “comparable” newer model and is another appropriate method of replacement if properly referenced in the appraisal and agreed upon by the parties involved.
Case-in-point Recently, a client brought us his Rolex, and a newly updated appraisal from the jeweler who had originally sold it to him. He had been insuring the watch for over fifteen years with adjustments for Rolex’s periodic price increases, but now the provided appraisal reflected a much lower value. Rolex had recently “updated” his watch with a slightly different base model and had totally discontinued its diamond bezel. Since the jeweler could no longer appraise the watch for identical new replacement, they chose the closest new available model value and referenced such on their appraisal. That new watch value was some five thousand dollars less than the older model, hence the client’s distress. Using the secondary market approach would reduce the insured value even more, but since the client wanted to insure his model watch this was the only method to reflect exact model replacement.
There was however, a third appraisal option - the last published price method. Handy when an article has been recently discontinued, it covers a lapse of time before the market sells out of the discontinued model or insures for a dollar amount rather than an actual watch. This is fine if agreed upon by all (especially the insurance company) and a clear statement of methodology is on the appraisal.
While the jeweler’s appraisal approach was certainly justified and reasonable, the client’s desire to list his particular model led us to cite both the secondary market value and the last available price from Rolex. This gave the client and his insurance company an option as to what level of coverage to use.
However, if the client were using the appraisal as a sales aid, the last published price method would not be acceptable because it gives a false impression of value. NGL will not provide this type of appraisal for jewelers or anyone other than the owner and then, specifically for insurance documentation only.

But you said it would appraise for "double"

“We guarantee it will appraise for double what you pay.” What’s wrong with this picture? Are appraisers supposed to reflect what things sell for in the marketplace or appease the jeweler by making everything sound like a steal of a deal? When avenues for discounted jewelry became prevalent in the marketplace several years back, this half-of-retail scenario held up for the discounters for a while. However if the retail markups in this industry have dropped – which they certainly have, so shouldn’t the apprised values? So why do some appraisers keep appraising sky
high even though the industry margins keep getting smaller? Because the “half price” jewelers want them to, that’s why.
The consumer does not appreciate hearing that their insurance company is offering them half of the appraised value in a settlement after paying premiums on the full amount, but guess what? The insurance companies are shopping through brokers and discounters for their replacement, and usually get better prices than consumers do. In establishing the original coverage they have to rely on the appraiser’s information and use that value portion to set premiums. If that value is way over a realistic purchase price it only inflates premiums and sets up a future confrontation with the client. Yes, appraisals need to reflect the overall marketplace and give the consumer options for replacement, but they also need to be realistic and not merely a “feel-good” value the jeweler wants “their” appraiser
to reflect.