A Burlington resident says her family was caught off guard by Canada’s tax system after losing both her mother and father in less than a year.
BURLINGTON – Ashley Galea believes that when her parents passed away less than a year apart, before reaching 65, the world lost two dedicated and honest individuals.
Her mother, who worked as a nurse until she died at 62, and her dad, who had retired from companies like Staples and Edgewell at age 60, had invested in a cottage near Collingwood. They envisioned it as their forever home. In January 2024, Galea’s mother passed away due to complications from sepsis, leaving behind an RRSP of about $715,000 for her father.
Her father later died in December from what was thought to be a heart attack, though Galea suspects there might be another reason.
“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 just 12 months, the family faced another shocking moment when they learned they owed $659,126 in taxes – partly because of the RRSP and partly due to capital gains tax on their property, according to Galea.
Galea mentioned that there was a will outlining how the money and estate were supposed to be distributed. The funds were intended for herself 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.”
Since withdrawals from an RRSP are taxed as income, taking out such a large sum results in being taxed at more than 50 percent, according to Galea.
She added that while she and her brother never expected to become wealthy overnight, they hoped for some financial support during this difficult time.
“It makes me angry to my core,” she said. “This is ridiculous, and the biggest problem is there is 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 a rich kid or anything but at least I thought we could maintain their property which they worked forever to have.”
Burlington Today reached out to both family’s lawyer and accountant for comments but did not receive any responses. Other accountants across Greater Toronto also declined quotes but suggested there might have been strategies available for avoiding such sudden tax bills – although details couldn’t be provided without reviewing specific tax returns.
Galea hopes others will learn from her experience about being more aware of taxes and estate planning.
“I would love to call someone at the Canadian Revenue Agency and tell them I am not a box on a piece of paper; my parents were not Elon Musk or anyone like that; I am still young; this is not income,” she said. “It is an estate.”
Following her parents’ deaths, Galea mentioned that she and her brother each received $50,000 from life insurance policies but much of it went toward maintaining the cottage as well as covering funeral costs.
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