David and Amanda have been married for 25 years. They have two kids who are both independent and out of the house. Three years ago, the couple sold their business Retail Inc. to a multinational company. They feel they have more than they require in term of assets and cash flow and have been giving consideration to making donations to their favorite charity; an organization called Paws and Claws that finds homes for dogs and exotic parrots. They were doing some research and came across an article in the Globe & Mail that shed some light on ways how charitable bequests can be made through insurance policies. The couple always had a risk management plan in place but after the sale of the business they are considering using their life insurance policies to plan a charitable gift. They are somewhat confused however as there are different implications to making such bequests and would like to speak to you in order to get some additional information. Below is a list of the insurance policies that the couple own: Policy Owner Policy Type Face Value CSV ($) Life Insured Beneficiary Annual Premium David 5-year term 350,000 NA Amanda Son 1,500 David Universal Life 450,000 88,500 David Son 2,900 Amanda 10-year term 500,000 NA Amanda Estate 1,200 Amanda Whole Life 175,000 42,000 Amanda Daughter 1,800 Amanda Universal Life 200,000 35,500 David Estelle (Friend) 2,200 Amandas Whole Life Insurance has an outstanding policy loan totaling $15,000, which she intends to pay back, but she just has not had the time. The couple has come to you to discuss how these donations can become part of their Estate Plan. Today is January 1st.

1. If Amanda and David wanted to transfer the ownership of all 5 policies to Paws and Claws today through an absolute assignment, calculate the total amount of their donation receipt they would be eligible to receive. (2 marks)