Canadian Families and the One Big Beautiful Bill: What You Need to Prepare

If you’ve been following U.S. tax news, you’ve probably heard about the sweeping legislation nicknamed the “One Big Beautiful Bill” that’s expected to bring significant changes in 2026. As a Canadian advice-only financial planner, I’ve been watching this closely because many of our clients have U.S. connections; citizenship, green cards, or children studying or living south of the border. As our country is tied so closely to the U.S., any shift in U.S. tax law can create ripple effects here in Canada.

Here are the key highlights we’re paying attention to and what they might mean for Canadians with U.S. ties:

A Big Boost to the Estate, Gift, and Generation-Skipping Tax Exclusion

One of the headline changes is a permanent increase in the U.S. estate, gift, and generation-skipping transfer tax exclusion to $15 million starting in 2026, with indexing for inflation thereafter.

For U.S. citizens living in Canada, this is good news. It means larger estates can pass to heirs without triggering U.S. estate tax. For many Canadian families with U.S. citizenship in the mix, this change alone could reduce or eliminate exposure to U.S. estate tax altogether, though careful planning will still be needed for certain asset types and cross-border ownership structures.

Introducing the New “Trump Accounts”

Another major change set for 2026 is the creation of “Trump Accounts,” designed for children under 18 who are U.S. citizens. Here’s how they’re expected to work:

• The U.S. government will make an initial contribution of $1,000 for eligible children.
• Families can contribute up to $5,000 annually, with no deduction for contributions.
• Contributions themselves won’t be taxable on withdrawal, but income earned in the account will be taxed in the child’s hands in the U.S.

So, what about Canadians with U.S.-citizen children? This is where things get murky. The Canada Revenue Agency (CRA) hasn’t issued guidance on these accounts yet.

Our experience with U.S. 529 education plans gives us some clues. Since those plans don’t receive special tax treatment in Canada, it’s likely the Trump Accounts won’t either. That would mean:

• Canadian tax could apply when the income is earned, not when it’s withdrawn.
• The parent making contributions could be taxed, rather than deferring tax until the child eventually takes money out.
• Grants may be considered taxable income to the account holder in Canada.
  Until CRA provides official direction, Canadian families should be cautious about assuming these new accounts will offer the same advantages here as in the U.S.

What About Other Tax Changes?

The One Big Beautiful Bill contains numerous tweaks to U.S. tax rates and deductions. Early analysis suggests most U.S.-citizen Canadians won’t see major changes to their tax bills, especially if they have typical income sources and straightforward structures.

That said, tax planning is never one-size-fits-all. Certain trusts, businesses, and investment types may be affected in unique ways. That’s why this is the perfect time to strengthen your relationship with a cross-border tax advisor who can run the numbers for your specific situation.

What Canadian Families Should Do Next

If you or your family members have U.S. ties, here’s how to stay ahead of the changes:

• Review your estate plan to see whether the increased exemption could simplify or improve your strategy.
• Wait for CRA guidance on Trump Accounts before opening one or making contributions.
• Work with cross-border tax specialists to understand how U.S. tax changes interact with Canadian rules; especially for trusts, corporations, or large investment portfolios.

The changes associated with the One Big Beautiful Bill will arrive quickly, as it seems as though 2026 might just be breathing down all of our necks.

As with all tax planning it’s best to get a handle on it before tax season really begins, as your professional team will be tight for time.

Your Spring Planning Team

Practice Notes:

Whew! Fall is busy with income planning, year end planning, and so much more. Julia and Ashlee both celebrated our children’s birthdays (on the same day!) in October, and we are looking forward to very intense weeks before year end.

We will be around, working away at getting all the analysis, advice, and information out to all our clients with as high quality and speed as possible – but know that we aim to err on the side of quality, which may slow speed! The Federal Budget comes out on November 4, and we’ll be looking for updates that will impact you. We’ll also be taking the day to reflect on November 11, Remembrance Day. Our holidays start Friday, December 19 and we will be back at work on Monday, January 5… 2026!

Spring in the News:

Planning Your Golden Girls’ Era? Julia spoke at an event a few months back, and the questions that came after were probably more interesting than the talk. You can read all about these – and the answers – right here.

“All ships go through storms, but they don’t (all) sink,” says Julia Chung. What is a recession… and what does it have to do with pop music? CBC Kids released this great video featuring teen journalist Warren Huson, check it out here.

Please check out our media page here for videos, podcasts, interviews and more.

Planning News Digest:

• Assessing when to start your CPP – Is it better to start CPP in late 2025 or wait until 2026? Fred Vettese’s latest article digs into the impact of annual inflationary increases, check out the full article here.
• Boosting Savings Deposits with Behavioral Science Nudges – Behavior Change for Good (BCFG) released a megastudy on a specific type of nudge that makes a difference for savers. You can read all about it right here.
• The Most Controversial Topics in Personal Finance – Our friend Ben Felix discusses these and the psychology behind them. Watch the video here.

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