Randall and Beth have been married for 22 years. They have two children who are both independent and out of the house. Last year, the couple sold their business Chapstick 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 Randall 10-year term 250,000 NA Beth Son 1,500 Randall Universal Life 550,000 88,500 Randall Son 2,900 Beth 5-year term 300,000 NA Beth Estate 1,200 Beth Whole Life 175,000 42,000 Beth Daughter 1,800 Beth Universal Life 220,000 35,500 Randall Genevieve (Friend) 2,200 Beths Whole Life Insurance has an outstanding policy loan totaling $11,000, 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 Randall and Beth 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) If Randall and Beth decided to complete an absolute assignment of both their term policies and Beths universal life policy as well as any applicable CSVs but continue to pay the premiums indefinitely for all the policies, calculate their eligible donation amount for the year. (2 marks)

3) If Randall decides to name Paws & Claws as the beneficiary of his term policy and removes his son as beneficiary, calculate the donation amount in the year of Beths death (ignore premiums)

4) What is the best course of action Randall can take to ensure that he becomes eligible for the donation in the year of death of the life insured (Beth) on his term life policy? (1 marks) 5)Randall and Beth decide to complete an absolute assignment as alluded to in question #1, the couple have incomes of $200,000 and $90,000 respectively. Which of the following statements are pertinent to their circumstances? 6) Based on your answer in question #2, calculate the donation tax credit assuming the couple claims the donations individually - income threshold for the year is $202,800. (2 marks)