Woman Faces Heavy Tax Bill After Parents’ Untimely Deaths

Ashley Galea is grappling with the financial fallout of her parents’ unexpected deaths, which occurred less than a year apart. Her mother, a nurse who passed away in January 2024 at the age of 62, and her father, a retired executive who died in December 2024 at 60, left behind a combined savings of approximately $715,000. Tragically, the family was unprepared for the significant tax burden that would follow.

Galea’s mother succumbed to complications from sepsis, while her father’s death is suspected to have been caused by a heart attack. Galea, however, believes he may have died of a “broken heart” after losing his wife. Following these losses, the family was shocked to discover they owed a staggering $659,126 in taxes. This figure arose partly from the Registered Retirement Savings Plan (RRSP) and partly from capital gains tax on their property in Collingwood.

Despite having a will in place that clearly outlined the distribution of their estate, Galea felt the government seized a significant portion of her parents’ hard-earned savings before she and her brother could access it. “Pursuant to the beneficiary and the will, all of that was supposed to come to us,” she explained. “But the government gets their hands on it first, and we essentially get all that is left over.”

Withdrawals from an RRSP are taxed as income, and Galea noted that a sudden withdrawal of this magnitude is taxed at over 50 percent. While she and her brother did not anticipate becoming wealthy overnight, they had hoped to maintain their parents’ cottage, which they had worked tirelessly to acquire. “It makes me angry to my core,” she stated. “I didn’t expect to be a rich kid, but at the very least, I thought we could maintain their property.”

Galea received $50,000 in life insurance following her parents’ deaths, a sum that was quickly depleted by funeral costs and the upkeep of the family cottage. The emotional strain of these losses has been compounded by the financial challenges that followed.

In an attempt to seek clarity, reporters reached out to the family’s lawyer and accountant, but neither responded to requests for comment. Other accountants in the Greater Toronto Area indicated that there might have been strategies to mitigate the sudden tax liability, although specifics could not be disclosed without reviewing tax returns.

Galea is hopeful that her experience will serve as a warning to others about the importance of understanding tax implications 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,” she said. “This is not income; it is an estate.”

As families navigate the complexities of tax regulations and estate laws, stories like Galea’s highlight the critical need for informed planning to prevent financial hardship during times of grief.