Wrongful Death Structured Settlement Payments in Divorce in Virginia

Annuity payments received by a woman as a structured settlement for her mother’s wrongful death shouldn’t be included as gross income for purposes of calculating child support, a Virginia circuit court has held. The woman claimed her annuity payments were capital recoupment and that Virginia excludes tort settlement proceeds from income 

“It is the Court’s position that the annuity payments are more akin to an asset or an inheritance, which is also excluded from gross income for child support purposes.” wrote Judge Rondelle D. Herman

Cite:  Jennifer Horn v. Darrell Smith Case No.: CL23-615  Virginia Circuit Court, 14th Judicial Circuit, Henrico County

Here Were the Positions of the Two Sides to the Dispute

Plaintiff

• The Plaintiff asserted that her (structured settlement) annuity payments should be excluded as income because the settlement compensated her for the loss of her mother.
• She argues that a wrongful death claim is based on the negligence of a tortfeasor and sounds in tort and, therefore, any (structured) settlement payments are not capital gains, but are capital recoupment.
• She further argues that Virginia Code§ 20-108.2(C) and case law excludes tort claim settlement proceeds as income. The form of the payment, such as (structured settlement) annuity payments, does not change the status as capital recoupment.

Defendant

• The Defendant asserts that the Plaintiff's annuity payments should be included in the computation 

        of her gross income

• The Defendant argues the wrongful death claim is not a personal injury claim and that the annuity payments are a capital gain constituting income for purposes of child support. 
• While both parties concede that the annuity payments are compensating the Plaintiff for the loss of her mother, the Defendant argues that the Plaintiff did not suffer a personal injury herself.

Based on the circumstances of the case, nothing precludes the Court from considering other factors for deviation purposes, wrote Judge Herman.

Last updated September 20, 2023

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