Dividing the Family Home in Divorce: What to Consider Before You Decide

For many couples, the family home is more than just an asset — it’s the emotional centerpiece of their shared life. 

But when divorce becomes a reality, deciding what happens to the house becomes one of the most complicated (and often contested) parts of the process.

KEY TAKEAWAYS:

• Whether keeping, selling, or co-owning the home, the best choice depends on affordability, equity, custody arrangements, and long-term stability. 
• The family home is considered marital property, even if only one spouse is on the title or mortgage. 
• Keeping the home should not come at the cost of financial strain for both people involved.

In Colorado, the outcome isn’t one-size-fits-all. Whether you keep the home, sell it, or consider other arrangements, the right choice depends on your financial situation, custody needs, and long-term stability.

Here’s what you need to know.

Property Division in Colorado: The Basics

Colorado is an equitable distribution state, which means marital property must be divided equitably — but not necessarily equally — during divorce. 

That includes the family home in most cases, even if only one spouse is on the title or the mortgage.

Marital property generally includes any asset acquired during the marriage, regardless of whose name it is titled in. With a few exceptions, if the home was purchased while you were married, it is most likely a marital asset, and both spouses have an interest in its value.

Should You Keep the House After Divorce?

Keeping the house might feel like the obvious emotional choice — especially when children are involved — but it’s a decision that should be made with clear eyes and full financial awareness.

Questions to Ask Yourself:

• Can I afford the mortgage and upkeep on my own?
  • What will the full monthly cost of ownership be, including taxes, insurance, and maintenance?
• Can I qualify to refinance the mortgage on my own?
• Does the house have enough equity to justify a buyout?
• Is staying in this home truly part of my long-term plan — or am I holding on for emotional reasons?
• Would selling the home give me more flexibility or financial security moving forward?
  • Am I giving up other potentially more important assets in the divorce to keep the house?

Depending on your answers to the above, it may be time to consider other options.

Three Common Options for Dividing the Home

Let’s look at the best options that a couple has whe it comes to a home in a divorce settlement.

1. Sell the Home and Split the Proceeds

This is often the cleanest solution. Selling the home provides liquidity for both parties and creates a clear break. It also avoids the challenges of refinancing or managing a shared ownership arrangement.

Why it works: A neutral exit, no long-term entanglement, and a financial reset for both sides where each side usually walks away with some cash assets.

2. One Spouse Buys Out the Other

If one spouse wants to keep the home, they may buy out the other’s share of the equity. This typically requires:

• A professional home appraisal
• A refinance in the staying spouse’s name alone
• A lump-sum payment to the other spouse or offset through other marital assets

Important: The spouse keeping the home must be able to qualify for a new mortgage and afford future expenses alone.

3. Temporary Co-Ownership

Some couples — especially with younger children — may agree to continue co-owning the home for a limited period. For example, one spouse may remain in the house with the children until they finish school, after which the home is sold.

Caution: Co-ownership after divorce requires a high degree of cooperation and clear written agreements around cost-sharing, decision-making, and the timeline for eventual sale or buyout.

What About the Kids?

For many parents, the desire to keep the home is tied directly to the children’s well-being — keeping them in the same school, neighborhood, or routine. Courts in Colorado won’t force a parent to stay in the home, but when custody is a factor, the stability of a parties’ living situation may influence parenting time decisions.

That said, keeping a house you can’t afford isn’t stability — instead it’s stress deferred. It’s okay to let go of the home if doing so puts you in a stronger position to parent well and plan for the future.

Who Should Be Involved in the Decision?

Dividing or keeping the home often involves more than just you and your attorney. Consider bringing in:

• A financial advisor to evaluate long-term affordability and the impact of keeping or selling.
• A real estate agent and/or appraiser to provide a current market value and assist with listing or buyout scenarios.
• A divorce specific mortgage lender to advise on refinancing options or pre-qualify you for a new loan in your name.

Be Realistic About Long-Term Affordability

It’s common for one spouse to fight hard to keep the house during divorce — especially when children are involved, or the home holds emotional value. But it’s critical to step back and consider the full financial picture.

What to consider: Can you afford not just the mortgage, but the ongoing costs of ownership? Property taxes, insurance, utilities, and maintenance all add up — and many newly single homeowners find themselves stretched too thin. Keeping the home shouldn’t come at the cost of your long-term financial health. Make sure it’s a sustainable decision, not just an emotional one.

Questions to Ask Before Deciding to Keep the House

Before committing to keep the family home, take a moment to assess whether it truly supports your long-term goals — both emotionally and financially. Here are a few key questions to help guide your decision:

Answering these questions honestly — ideally with support from a legal or financial professional — can help ensure your decision is grounded in stability, not stress.

Contact Geigle | Morales today to schedule a consultation. Whether you’re deciding how to handle the family home or weighing your broader property options, we’ll help you make decisions with clarity, confidence, and a plan for what comes next.