A resident of Burlington shares that her family was caught off guard by Canada’s tax policies after losing both parents in under a year.
Ashley Galea reflects on how the passing of her parents, who each died before reaching 65, took away two diligent and law-abiding individuals.
Her mother, a nurse who passed away at 62, and her father, a retired executive from companies like Staples and Edgewell who died at 60, had invested in a cottage outside Collingwood. They envisioned it as their forever home.
In January 2024, Galea’s mother succumbed to complications from sepsis, leaving her father with a combined RRSP of about $715,000.
Her father passed away in December due to a suspected heart attack; however, Galea believes there might 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 less than a year, the family was stunned once again when they were faced with a hefty tax bill totaling $659,126 – partly due to the RRSP and partly because of capital gains tax on their property, according to Galea.
Galea explained that there was an existing 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 withdrawals from an RRSP are taxed as income, taking out such a large sum incurs taxes above 50 percent, Galea stated.
She mentioned that while she and her brother never expected to become rich overnight, they did hope for some financial support during this tough 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 keep their property which they worked forever to have.”
Burlington Today contacted the family’s lawyer and accountant but received no responses. Other accountants in Greater Toronto shared informally that there might have been strategies available to avoid such an unexpected tax burden – though specifics required reviewing tax returns.
Galea hopes others will learn from her experience and realize how important it is to understand taxes and estate planning better.
“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 stated she and her brother each received $50,000 from life insurance policies; most went toward maintaining the cottage and covering funeral costs.
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