4. A. ABC Corporation is considering its succession planning objectives and its CPA has suggested that ABC Corporation enter into a deferred compensation agreement with all of the shareholders. A is age 50, B is age 45, and C is age 40. The CPA suggests funding the agreement with life insurance. You were recommended to the shareholders as a credible source of information. Do you agree or disagree with the recommendation to purchase life insurance to fund the deferred compensation agreement? If you agree, what product(s) will you recommend and why? Who will be the owner beneficiary and insured of the plan?

B. Ma & Pa, Inc. was established in 1986 by a married couple that each own 50% of the capital stock. The two shareholders produced a son, age 27, and a daughter, age 21. The son is a graduate of Iowa State University engineering college and the daughter will receive a finance degree from the University of Iowa in the Fall of 2017. The son works for an engineering firm and the daughter has accepted employment with a bank. Both have skill sets that are valuable to the business and each has signaled a desire to return to the family business but first want to explore other venues. The shareholders/parents would love to see their children become involved in the business but know at this point it is only a possibility. Ma & Pa, Inc. has an individual employee that has been with the business for 20 years and is a proven leader. Shareholders, employee, son, and daughter are all insurable and there is enough money to pay premiums. Ma & Pa, Inc. is the largest asset in the shareholders net worth but there are no transfer tax issues present under current law. The shareholders have come to you for advice and counsel and note the following objectives: (1) Upon the death of the last of them to die, the shareholder parents desire that their net worth pass to the children in equal shares; and (2) the shareholder parents desire to make the employee a shareholder even if one, both, or no children return to the family business. Devise a plan that accomplishes these objectives and tell me how life insurance can assist in the accomplishment of the objectives. USE BULLET POINTS TO SUMMARIZE YOUR THOUGHT PROCESSES RATHER THAN COMPLETE SENTENCES. Use a diagram to illustrate your points. Be certain to identify the owner, insured(s), and beneficiary (ies) of any life insurance policy (ies) you recommend.