3. Assume that Pavel also wants life insurance coverage to pay for personal tax liabilities at death. He asks Stuart whether he should hold that policy himself in his individual capacity or through ABCL. What is likely to be Stuarts response?

(A) Pavel, you should hold that policy yourself in your individual capacity because at the time of your death, proceeds of the policy will bypass probate and the corporation, and go directly to your estate or designated beneficiary to be used to pay off the personal tax liabilities.

(B) Pavel, you should hold that policy inside ABCL so that at your death the insurance death benefit, less the policys adjusted cost basis, could be flowed through ABCL tax-free to your estate via its capital dividend account.

(C) Pavel, you should hold that policy yourself in your individual capacity because at the time of your death, the insurance proceeds could be flowed through your personal capital dividend account tax-free to your estate.

(D) Pavel, you should hold that policy inside ABCL so that at your death the insurance proceeds could be flowed through ABCL tax-free to Bronson and Nigel, your key managers.