Under the law of some community property states, married persons may agree to convert some or all of their separate property to community property. Such an agreement may be referred to as an agreement to convert separate property to community property or as a transmutation agreement.

The legal character or nature of debts of married persons may also be changed by transmutation in some community property states—changing debts of the parties’ separate estates to debts of the community estate, or debts of the community estate to debts of the separate estates. But an agreement between married persons to change a community debt to the debt of one of the spouses separate estates may not be binding on the creditor—unless the creditor agrees in writing to only look to one spouse for satisfaction of the debt.

In community property states, the laws regarding the availability and scope of transmutation agreements vary from state to state. These laws are usually located in a state’s statutes—often in the family code or domestic relations code.

Montana is not a community property state; it is an equitable distribution state. This means that during a divorce, marital property is not automatically split 50/50 but rather divided equitably (fairly) as determined by the court. Since Montana does not follow community property laws, the concept of transmutation agreements to convert separate property to community property, or vice versa, does not apply in the same way it does in community property states. However, Montana law does allow spouses to enter into marital agreements (also known as prenuptial or postnuptial agreements) that can specify how property is to be treated upon divorce. These agreements can include provisions about the division of both assets and debts. For such agreements to be binding, they must be in writing and executed voluntarily and with full disclosure. It's important to note that creditors are not bound by agreements between spouses regarding the responsibility for debts unless the creditor agrees in writing. Therefore, in Montana, while spouses can agree on the division of property and debts, the state's statutes related to equitable distribution will guide property division in the absence of a valid marital agreement.