Va. Code 107.3, Virginia's "equitable distribution"statute, defines property as tangible and intangible, which encompasses houses, cars, bank accounts, retirement assets (including pensions), and even debts. Paragraph A.3(c) tells us that personal injury awards can be marital property, depending on the circumstances, and Paragraph H fills the picture in a little more by telling us that the marital share of a PI award is that part that is attributable to lost wages or unreimbursed medical expenses, "before the last separation of the parties."
Thus, if the cause of the accident occurred prior to the marriage or after the final separation of the parties, then none of it will be marital. On the other hand, if it took place during the marriage, the accident and any consequent award from it will be presumed marital. We can rebut that presumption, but we will need to determine how much of the award is attributable to lost wages or uncovered medical expenses, as opposed to "pain and suffering."
If you are the spouse who suffered the accident, and the cause occurred during the marriage, the burden is on you to prove what part of the award is separate property, otherwise it will be deemed 100% marital. You must show that the award, whether from another court or an insurance company, was exclusively for injuries personal to you, and do not include compensation for what the Court of Appeals calls "economic losses," i.e., wages, medical bills, and attorney fees. See Thomas v. Thomas, 13 Va. App. 92 (1991).
The pain and suffering component, in other words, is your separate property. How do you prove this? In a 2010 case, Olsen v. MacKay, the Court of Appeals looked closely at the settlement documents and stipulations for a breakdown of all parts of the award. Economic losses, the court reiterated, are marital; "non-economic" losses are separate property, and the best evidence of this are the settlement documents or court order.
So, the crux is to make sure that the documents governing your accident recovery specify very clearly how much of the award is for fees, costs, lost wages, medical bills, and, most importantly, pain and suffering.
Are personal injury awards regarded as income for child support or spousal support purposes? Yes. Paragraph C of Va. Code 20-108.2, Virginia's principal child support statute, defines income for support purposes (including spousal support, according the Virginia Court of Appeals) as income "from all sources," and it provides a list of examples. Personal injury awards are not specifically mentioned, but that will not prevent a trial court from ruling that money received for "economic losses" (lost wages, etc.) does constitute income. The pain and suffering component will mostly likely to be included, as well.
Va. Code 20-107.1, the spousal support statute, has a list of "factors" that a judge must consider when fashioning a spousal support award, and the first of them is "the obligations, needs and financial resources of the parties." And Factor 7 is the "property interests of the parties, both real and personal, tangible and intangible." These two factors would cover a PI award, in my opinion.
In sum then, a PI award can be 100% marital, unless the injured spouse can prove the amount attributable exclusively to pain and suffering. If the award is entirely or partly one spouse's property, it can also be regarded as income for the purpose of calculating child and spousal support.