A Burlington woman shares her family’s shock at Canada’s tax system after losing both parents within a year.
Ashley Galea reflects on how, when her parents passed away less than a year apart and before turning 65, the world lost two dedicated and honest individuals.
Her mother was a nurse who died at 62, while her father, a retired executive for companies like Staples and Edgewell, passed away at 60. They had purchased a cottage outside Collingwood that they hoped would be their forever home.
In January 2024, Galea’s mother died from complications related to sepsis, leaving her father with an RRSP totaling about $715,000.
Her father died in December due to a suspected heart attack; however, Galea believes there may be another explanation.
“We still don’t really know the answer; we think a heart attack but the only explanation that makes sense is he died of a broken heart,” she said.
After losing both parents within such a short time frame, the family was stunned once again when they discovered they owed a combined tax bill of $659,126 – partly due to the RRSP and also capital gains tax on their property, according to Galea.
Living in Burlington, Galea mentioned there was a will outlining how the money and estate should be handled. The funds were meant for her and her brother.
“We were noted as beneficiaries on the RRSP,” she said. “Pursuant to the beneficiary and the will, all of that was supposed to come to us but the government gets their hands on it first and we essentially get all that is left over.”
Because money withdrawn from an RRSP is taxed as income, taking out such a large amount results in being taxed over 50 percent, explained Galea.
She and her brother didn’t expect sudden wealth but thought they’d have something saved up for them.
“It makes me angry to my core,” she said. “This is ridiculous; the biggest problem is there’s nobody to talk to. I have nobody to say, ‘Hi, I am an orphan; I have nobody to support me and the government has taken every cent they earned.’ I didn’t expect to be rich or anything like that but at least I thought we could keep their property which they worked hard for.”
Burlington Today reached out for comments from the family’s lawyer and accountant but received no response. Other accountants in Greater Toronto also declined quotes but indicated there might have been ways around this hefty tax bill-though specifics would require reviewing tax returns.
Galea hopes others can learn from her situation so they can better understand taxes and estate planning.
“I would love to call someone at the Canadian Revenue Agency and tell them I am not just a box on paper; my parents weren’t wealthy people like Elon Musk or anyone else like that. I’m still young; this isn’t income,” she said. “It’s an estate.”
Galea mentioned she and her brother each got $50,000 from life insurance after their parents passed away; much of it went towards maintaining the cottage and covering funeral costs.
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