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.

New Jersey 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 is divided equitably as determined by the court. The concept of community property, transmutation agreements, or converting separate property to community property as described does not apply in the same way as it does in community property states. In New Jersey, spouses may enter into a prenuptial or postnuptial agreement that outlines the distribution of their assets in the event of a divorce, which can include provisions on how separate property is treated. However, these agreements must be in writing and are subject to certain legal requirements to be enforceable. Debts incurred during the marriage are typically considered joint debts, but the responsibility for these debts post-divorce will be determined during the equitable distribution process. Creditors are not bound by agreements between spouses unless the creditor agrees in writing to the terms.