I have read that Rabbi Avraham Yosef (the son of Rav Ovadiah Yosef) paskened that a Baal Teshuva in Israel should adopt the Sephardic Minhag, regardless of family history, as their immediate ancestors did not provide a Mesorah and the named Minhag is the one dominant in and traditional to the region. Does any one know of a counter-ruling on this issue? Is there an analogous ruling on appropriate BT Minhag in America?
R' Dovid Cohen (in Monsey, NY), who is a particular expert in areas of halacha concerning ba'alei teshuvah, rules that a ba'al teshuva (whose parents aren't observant and therefore has no minhag avot) may choose from among the accepted minhagim. I used this psak to choose Sepharadi minhagim, but one could just as easily use this psak to choose Ashkenazi, Chassidic or Yemenite minhagim.
The Rabanim Yosef's psak is based on the Halacha that once an authority has been established in any region that authority becomes the "Mara D'Atra" (the regional authority). All those living in, or joining, this area are then required to follow the Halachic rulings (psak) of that authority.
The question then becomes is there a Mara D'Atra in Israel, and if so who would that be. The Rabanim Yosef chose the Beit Yosef (Rav Yosef Karo) and they have good reasons for that (beyond the shared name).
When one follows the Beit Yosef he is considered to be following the Sefardi psak. Other rabbis, Sefradi rabbis included, have given different decrees, but are still "Sefardim".
I don't think there is one specific set of minhagim that one must absolutely adopt. However, a person should not pick and chose minhagim according to his or her liking. Taking on a specific way of understanding halachah and jewish practice should not be taken lightly. If a b't knows his/her family history it makes it much easier to decide which minhagim to take on. on the other hand if not then best to ask your mentor/teacher or rav on specific decisions.