by Elli Schochet, CPF
As 2026 begins, Canadian families face a pivotal year of planning. Bill C-15, the Budget 2025 Implementation Act, is still moving through Parliament and, if enacted, would shape how several tax and estate measures apply in practice. At the same time, other timelines are converging, including deferred trust reporting requirements and changes affecting post-mortem planning. Against this backdrop, understanding how legislative changes play out in real life has become more urgent.
For families planning or actively transferring wealth, Bill C-15 is notable not because it rewrites estate-planning rules, but because it highlights the risks families already face when wealth moves from one generation to the next. At its core, it reinforces a reality many families underestimate: even well-designed estate plans can fall short if liquidity and timing are not addressed carefully.
Trust reporting and life insurance: added clarity, not simplification
Trust reporting requirements, which govern what information trusts must file annually with the CRA, have increased the administrative burden for many families, particularly those using trusts as part of an estate or succession plan. Bill C-15 proposes a clarification that would explicitly recognize exempt life insurance issued by a Canadian life insurer as a qualifying asset for a reporting exemption tied to a $250,000 fair market value threshold. For this purpose, the policy’s value is based on its cash surrender value.
For families, this change matters less as a technical detail and more for the certainty it could provide. Life insurance is not a mere add-on to modern estate planning. It is often built directly into trust structures, and clearer rules around how it is valued and reported help reduce uncertainty and the risk of unexpected compliance issues
Post-mortem planning: more time, but no relief from upfront tax
Bill C-15 would extend the period during which estates can apply certain tax losses to reduce taxes owed at death. Under the proposed changes, estates would have access to post-mortem planning across the first three taxation years, rather than the shorter window previously in place.
This additional time could allow for a more measured approach, particularly where private company shares or complex corporate structures are involved. However, it does not change a key practical challenge: taxes triggered at death are often due before an estate has time to carry out its post-mortem planning strategies. If those taxes are not paid on time, interest and penalties may apply even if refunds are generated later through proper planning.
The risk families still face
Across trust reporting, post-mortem planning, and succession strategies, one issue consistently affects outcomes: having access to cash when it is needed most. Many estates are asset-rich but cash-poor. They may hold operating companies, real estate, or long-term investments that cannot be easily sold on short notice. Without sufficient liquidity, families can be forced into rushed decisions, including selling assets earlier or on less favourable terms than intended.
This is where life insurance plays a central role as a risk-management tool. When structured properly, it can provide predictable liquidity at a critical moment, allowing other planning strategies the time they need to work. In corporate settings, it can also support broader post-mortem and succession planning. Bill C-15 does not change this role, but it makes the consequences of ignoring liquidity more visible.
Takeaway for Canadian families
Bill C-15 is not a sweeping overhaul of estate planning rules. Instead, it underscores a long-standing truth: legislation can adjust planning tools, but it cannot fix execution problems. Families who focus only on tax efficiency and legal structure, without considering timing and cash flow, may face avoidable pressure during estate administration.
For families with cross-border ties, these pressures can be compounded by different tax systems, currencies, and timelines. While Bill C-15 is Canadian legislation, the challenges it highlights are familiar to many families with assets or beneficiaries outside Canada.
As 2026 unfolds, the difference between a plan that works on paper and one that works in practice will matter more than any single legislative change.
For more information, contact Elli Schochet, CFP, at info@algbrown.com.
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