CTV News
By Pat Foran
September 26th, 2025
Daughter hit with $660,000 tax bill when both parents died in same tax year: Ontario family shocked their deceased parents RRSPs needed to pay almost their entire final tax bill…
An Ontario woman says she had to use nearly all of her parents’ retirement savings to pay off a more than $660,000 tax bill after they both died within the same year. Ashley Galea said she and her brother were grieving the loss of their parents when they received the tax bill from the government.
“It made me more angry than anything. We lost both our parents inside 11 months and (the Canada Revenue Agency) made it clear they wanted their money,” Ashley Galea told CTV News. Galea describes her parents as “middle class,” working hard in their careers in nursing and business to save up to buy a cottage in 1998 and contribute money to their Registered Retirement Savings Plans (RRSPs).
Five years ago, they sold their family home and made the cottage their principal residence. When they both died last year, during the same calendar tax year, Galea’s mother’s RRSP rolled into her father’s RRSP for a combined total of $715,000. When her father died, the RRSP amount had to be taxed as income at about 50 per cent.
Even though they lived at their cottage for the last five years, Revenue Canada still wanted a portion of the capital gains of that property from the time they owned it from 1998 to 2019. The combined tax on the RRSP amount and the capital gains tax totalled $669,126.
Galea said to avoid selling the family cottage, they were advised to use almost the total amount of RRSPs to pay off that tax bill. The money Galea’s parents saved up, she said, was expected to go to her and her brother, but now there is almost nothing left over after their parents funerals and other expenses.
Evelyn Jacks, a tax expert with the Knowledge Bureau, said families should adopt a strategy to reduce the amount of tax they pay, use life insurance, and get advice from a professional to avoid a massive tax bill when a loved one passes.
Galea said her parents did have a small life insurance policy for her and her brother. She said she is still grieving the loss of her parents, but wanted to share what happened to her family to help others.
