Early in my tenure at Accounting Today, I got to sit in on a visit to our office from the newly installed head of a major regulator. Their predecessor in the role had been extraordinarily active and strongly focused on a few, very specific areas, so I thought it made sense to ask our guest if they planned any changes in direction or new approaches.

They reacted as if I’d slapped them in the face, and with icy disdain informed me that they had worked under the previous regulator (which I well knew) and that they saw no need to make any changes whatsoever.

Looking back, I’m sure they must have thought that I was trying to get them to badmouth their predecessor, but at the time I was dumbfounded. It seemed to me then that a change in command is a natural time for organizations and their leaders to take stock of where they are, and to consider new directions, new ideas and new approaches. It still seems that way to me, and to fail to do so seems a waste of a great opportunity.

Why wouldn’t you take advantage of such a moment to ask if your current direction, goals and culture will drive success in the future? A host of changes big and small can be ushered in under cover of the overarching change at the helm, when you are no longer bound by the priorities of the outgoing leader. (Of course, in many cases the right choice might be to reaffirm those priorities and to recognize their wisdom — but you’ll never know unless you critically examine them, and too many organizations fail to do that.)

And it’s not only transitions at the top that offer the opportunity for new thinking. I’ll go further and say that any change in personnel, at any level of the org chart, should be a moment to stop and think and look ahead, to reexamine a position before you start trying to fill it in a job market where candidates are few and far between. The right answer might not be replacing a departing employee or partner at all, but instead reimagining their role; that may take the form of reallocating their responsibilities and tasks to other employees, to new technologies, or to outsourcing partners — or eliminating the role entirely, and possibly hiring for a new and different role instead, one that may help lead the firm into the future, rather than replicating its past.

All this is not to say that change is always the right choice, or that we need to take every opportunity to jettison the past; the point is that we need to take every opportunity to examine the past and see if it’s worth repeating — and that making a break with the past isn’t about repudiating it, but about choosing a different future.

An irrevocable trust is an essential tool in the kit of most estate planners, not only for sheltering assets from future estate tax, but for protection from potential creditors and lawsuits. Depending on the state, there are different rules regarding amending or modifying the terms of the trust. In most cases, the terms cannot be modified without the consent of each of the beneficiaries. 

In what is at least a preliminary setback, Rupert Murdoch and his eldest son, Lachlan, were recently denied their attempt to change the terms of a family trust in Lachlan’s favor. 

The trust was set up as part of a settlement agreement in Murdoch’s second divorce. The problem with an irrevocable trust, of course, is that it really is irrevocable. If the grantor of the trust retains any attributes of ownership, it would lose its protection against potential creditors of the grantor. 

Julia Demaree Nikhinson/Bloomberg

Why would someone want to change the terms of such a trust? 

In the case of Rupert Murdoch, observers believe that his son Lachlan’s political orientation aligns more closely with that of his conservative father, as opposed to his more left-leaning siblings. But the proceedings of the probate court in Nevada, in which the trust was formed, are sealed. 

“Most people believe an irrevocable trust cannot be changed, but in fact, depending on the state, there are circumstances in which it can be changed,” said Brinkley Morgan attorney Salvatore Pomidoro. “Frequently, clients name an independent party that would have the ability to change the trust in certain circumstances — for example, to react to tax law changes, or if the trust no longer has a valid purpose. People are finding ways to take something that is not concrete and make it flexible. But by modifying the trust it may lose its primary objective, which is to minimize estate tax. They’re not attempting to change the proportional interests of the four children, but simply to make sure that Lachlan gets to manage the business.” 

Murdoch is expected to appeal the ruling. “Rupert Murdoch, as the creator and beneficiary of the trust, definitely has standing to appeal and attempt to object to the probate judge’s ruling,” said Raul Gastesi, co-founder of law firm Gastesi Lopez & Mestre. “Now, whether or not Mr. Murdoch is successful is a whole other issue. It is difficult to convince an appellate court to overturn a trial judge’s ruling when they are challenging the findings of fact, as opposed to questions of law. The ruling in this case has to do with whether or not Mr. Murdoch and others made the changes to the trust in good faith. That was a factual finding, extensively documented by the trial court judge who observed the witnesses firsthand and made a determination based on those observations. It is extremely difficult to overturn findings of fact. In this case the judge made a finding based on the demeanor and credibility of the witnesses.”

If this involved a question as to what is a law on a certain issue in Nevada, the appellate courts are much more willing to entertain an appeal and would certainly consider overturning a lower court judge’s ruling that they consider inconsistent with the law, according to Gastesi.

“It does not appear that this will be the analysis the court will be asked to engage with on appeal,” he said. “It appears that the court will be asked to weigh in on factual findings which do not have a likelihood of success.” 

Archeologists have uncovered a set of court documents for an ancient Roman tax fraud and forgery case in the then-province of Judea connected to sham transactions involving the sale and manumission of slaves. 

More specifically, they discovered and translated a Greek papyrus that was found to be a memorandum for a judicial hearing before a Roman official during the reign of Hadrian, after the emperor’s visit to the region in 129/130 CE and before the outbreak of the Bar Kokhba revolt in 132, said the paper. It was found in a cave in the Judaean Desert.

The archeologists note that the condition of the scroll means many details remain unknown, such as the precise location of the trial or the citizenship status of the defendants. One thing they do know, however, is that the case had two main defendants: one man named Gadalias and another named Saulos, who both stood accused of corrupt dealings. 

Kristof – stock.adobe.com

Gadalias was the son of a notary and archival official “and therefore presumably belonged to the officeholding class of his community.” The scroll characterized him as a corrupt individual who was known to the authorities as having a history of violence, extortion, counterfeiting, and inciting rebellion. For instance, the text mentions a previous hearing before a Roman official named Postumus during which a document presented by Gadalias was found to have been forged or manipulated. 

Meanwhile, Saulos was named as a friend of Gadalias and his partner-in-crime, though it seems little else about his background was mentioned. However, he is believed to have been the prime instigator of the scheme. While Gadalias is better known, the authors believe “his role in the events seems to have been limited to facilitating the manipulation of documents by virtue of his position as the son of the local chreophylax” (a kind of financial official).

The scheme

The archeologists, once again noting that many details are missing, said their best interpretation of the accusation is that Saulos approached an associate named Chaereas, who owed him money. Saulos apparently directed him to engage in a sham transaction where Chaereas paid to “buy” several of his slaves while retaining possession himself. Afterwards, the document says, Saulos and his father then freed these slaves in Chaereas’ name without paying the required taxes. 

The scholars aren’t entirely clear on what fee was evaded. They theorize it could have been a 4% tax on direct slave sales, a 5% tax on manumission by Roman citizens, a poll tax that slave owners were obligated to pay on behalf of their slaves (ownership of slaves was a matter of official record and entered into census counts), a toll on imported slaves (up to 25% depending on province), or birth registration fees for houseborn slaves. 

They’re also not entirely clear on why the scheme was enacted. The most likely explanation, they said, was that Saulos wanted to conceal his assets from the Roman government by nominally alienating his own slaves to Chaereas. By pretending to sell off his slaves or buying them without using his own name, Saulos may have sought to lower his recorded wealth in order to diminish his tax burden and evade the costly and time-consuming public service obligations imposed by the Roman state on persons above a certain wealth threshold. He may also have tried to avoid paying existing or expected debts or penalties to the state. The document itself describes similar types of schemes where individuals cheat their property assessment by, say, deliberately cutting down vines and trees or avoiding the registration of slaves in the census. 

The authors believe Saulos may have been nominally selling off young slaves (who had never been entered into the census) before they entered the age of tax liability. The undeclared status of these slaves might explain how they got caught, as the registration of the sale could have been the first time ever a particular slave was reported to the provincial administration — this was at a time when it was customary to provide registered documentation of the slave’s previous ownership, as well as birth declarations and census returns demonstrating they had been properly declared with all taxes paid. 

“If any documentation was missing or appeared dubious, this could have sparked an inquest by Roman fiscal officials that resulted in desperate attempts to manipulate or forge the necessary documents by Saulos and his collaborators,” said the paper. 

The authors do offer another possible motive: Saulos was Jewish, which meant he had religious obligations regarding the treatment of slaves. He could have freed the slaves that were “bought” in order to possibly take advantage of a provision outlined in Leviticus (25:47–54) which states a Jewish slave sold to a non-Jewish owner must be redeemed by a fellow Jew, who then becomes his master; or because he simply wanted to free Jewish slaves but did not want to pay taxes on doing so. On this latter motivation, the authors said this could be because of obligations of Jews at the time to free Jewish slaves after seven years of service, or simply because they wanted to. However, the actual ethnicity of the slaves in question is not confirmed.

And what of the accused forger, Gadalias? The prosecutor expected he would say he knew nothing of the forgery, and that if the documents had been falsified, that was because of his father, who conveniently enough was already dead. However, even if that were the case, he would still be liable for simply presenting the false documents, as well as for the financial damage that resulted from the forgery. Despite his protestations of good faith, he was also accused of deliberately withholding documents from Roman authorities in the course of the investigation (essentially, obstruction). 

“Ultimately, even if Gadalias could persuade the judge that he was acting in good faith and the dubious document was drafted under his father, financial damages due to the fiscus as a result of the fraud were still heritable by him on his father’s behalf,” said the paper. 

Prosecutors apparently argued that the pair had been convicted previously for counterfeiting coins, which established both their history of criminal activity as well as the fact that, despite the attempted blame-shifting, they work together. They also mentioned Gadalias’ many other crimes. 

The specific outcome of the hearing is unknown. However, the authors believe that the very fact that the document’s existence — as well as its discovery in a desert cave — indicates that the case was not closed. 

“It may be argued that the very survival of [the papyrus] indicates that the case was not yet closed at the end of the hearing. It is remarkable that this record, which was per se of an ephemeral nature, was not only retained but also brought by its possessor to the caves of the Judaean desert during the Bar Kokhba rebellion. This testifies to the enduring importance of the document, and may be a sign that the case had not reached its conclusion,” said the paper.