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.

Vermont 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 in a manner that is equitable, or fair, which may not necessarily be equal. In community property states, spouses may enter into transmutation agreements to convert separate property into community property or vice versa, and they may also attempt to change the nature of debts from separate to community or the other way around. However, since Vermont does not follow community property laws, the concept of transmutation agreements as described does not apply in the same way. Instead, spouses in Vermont may enter into prenuptial or postnuptial agreements to address the division of their property and debts. These agreements can specify what is considered separate property and how property should be divided upon divorce. Creditors in Vermont are generally bound by the terms of the debt agreement, and any change in the responsibility for the debt would typically require the creditor's consent.