This should not happen, the ruler should always keep the crown on him (semi serious, but yea, i saw that 2 times now and its... irritating, especailly given the logo and all lol)
I believe he should be able to give it to the next in line, so when he/she dies, the one holding it can step up. But that's not the case. It's always a random successor (at least to me). If it's not given to the noble you choose to ne next in line, I think think it should probably be worth a LOT more than just 10 prestige. Maybe a really stupid-high number like 500. That way the leader is almost always at the highest prestige.
Ha - we have some ideas for succession, and I like that they can wear something other than the crown. That said, it'd be cool if there was something special they could do with it.