With regard to assuming Arms within the United Kingdom. In Scotland it is illegal and you can be prosecuted if you display Arms to which you are not entitled. In England & Wales there is often a lot of nonsense written about the College of Arms could and could not do, especially during the Visitations.
Whilst I am sure some Arms were genuinely "lost" because they were not recorded, the unfortunate fact is that they would not now be recognised as "lawful" ( there would have to be documentary proof to convince the College otherwise).
The College of Arms does not have the legal "weight" as the Lyon Court but it could, in the future, put the heraldic boot in. If you were to devise your own Arms for use in private there would not be a real problem. It is a bit like having your own family rules for playing cricket/football etc.. No one is really bothered until you try to use those rules in a "proper" game. If your child or grandchild was so successful in their career that they were honoured in some way that included the display of their Arms, there would be some possible embarrassment when the College of Arms informs them that the Arms they have used for generations are bogus. [My ggg-grandfather married an heiress and one branch of her family displayed Arms in various 19th century publications. I wondered if she was also a heraldic heiress and so delved a bit deeper. Unfortunately, that branch of the family had either assumed or been misled into believing their Arms were genuine. I think it came to light in the 1890s when they wished to quarter the Arms of a heraldic heiress with theirs. The result was a new grant that was similar to the assumed Arms but sufficiently different to ensure that the Arms were clearly new.]
