We administer 2 plans of two companies, one company owned 50/50 by husband and wife; one owned 50/50 by the two adult children.

This is not a controlled group, there are no shared employees.

For HCE status are the non-ownership adult children 5% owners of the corp that they do not own; and likewise, are the parents 5% owners of the corp tha they do not own?

If the parents work and have compensation from their children's company or the children work and have compensation from their parent's company, then the family attribution rules of Sec. 318 take effect.