probate - is there any requirement to prove assets were legitimately acquired?

Question

If someone of seemingly modest means dies and is found to have significant assets of unknown origin, is there any obligation on the part of any heirs/executors to prove those assets were obtained legitimately before they can inherit?

Lets say someone dies and his children discover his collection of Faberge eggs in a chest under his bed. Would it be up to his children to prove they were acquired legally, or would it be up to the heirs of the original owners to prove they weren't?

Would it make any difference if the assets were untraceable - if it was a previously undiscovered collection of Leonardo da Vinci artworks or a simple stack of gold bars?

(Unfortunately, this question is purely hypothetical)

UPDATE for clarity - by "assets of unknown origin" I'm excluding obviously stolen / looted property. Gold bars with a Brinks Mat stamp, or the original Portrait of a Young Man are both clearly stolen property, but 7 Faberge eggs remain missing.

Answer 1

If someone of seemingly modest means dies and is found to have significant assets of unknown origin, is there any obligation on the part of any heirs/executors to prove those assets were obtained legitimately before they can inherit?

Proof of a legitimate source for property is not any more of an issue for heirs than it is for anyone else.

There are some things that are simply illegal for an ordinary person with no special government permission to own (e.g. cocaine, plutonium, machine guns, small pox samples). But, assuming that it isn't inherently illegal to possess, you don't have to prove that it is legal to inherit it.

If the person who died didn't have good title to the property (e.g. because it was stolen), the heirs don't either. But that is the same problem for a living person who owns property as it is for an heir. There is nothing in the probate process that requires this to be proved up or established unless someone intervenes in the case to claim ownership of the property.

The same rule applies if you are given a gift.

If you buy something from someone for fair market value without knowledge that something is amiss, you are a bona fide purchaser for value, who unlike an heir or gift recipient, can sometimes have greater rights than the person transferring the property in particular circumstances. But the general rule is that you receive the ownership rights of the person from whom you acquire property.

Note, however, that the property in the estate has to be listed in an inventory prepared by the executor upon taking office, and often has to be valued and reported for inheritance and estate tax and capital gains tax purposes, where those apply.