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.
In Texas, which is a community property state, spouses have the ability to change the character of their property from separate to community through a written agreement. This is often referred to as a 'conversion agreement' or 'transmutation agreement.' Under Texas Family Code, specifically Section 4.203, spouses can convert separate property into community property by signing a written agreement that identifies the property and the intention to convert it. The agreement must be voluntary and signed by both parties. As for debts, while spouses can agree to transmute the nature of a debt from community to separate or vice versa, such an agreement does not necessarily bind creditors. Creditors may still have the right to pursue both spouses for community debts unless they agree in writing to look only to one spouse's separate estate for satisfaction of the debt. It's important to note that these agreements must comply with Texas law and may require additional formalities to be legally binding.
