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THE SUPREME COURT OF NEW HAMPSHIRE

___________________________

Merrimack

No. 2014-0762

STEVEN J. COHEN

v.

JOHN RAYMOND & a.

Argued: September 24, 2015

Opinion Issued: November 17, 2015

Shaheen & Gordon, P.A., of Concord (Steven M. Gordon and Benjamin T. 

Siracusa Hillman on the brief, and Mr. Hillman orally), for the plaintiff.

Orr & Reno, P.A., of Concord (Robert S. Carey on the brief and orally), for 

defendant John Raymond.

HICKS, J. The plaintiff, Steven J. Cohen, appeals an order of the 

Superior Court (McNamara, J.) ruling that $250,000 that Cohen deposited into 

an investment account in the name of defendant John Raymond was an 

unconditional gift. Cohen argues, among other contentions, that the trial court 

erred by: (1) finding that the $250,000 was an unconditional gift, rather than a 

loan or a conditional gift; and (2) presuming that the $250,000 was a gift,

thereby placing the burden on Cohen to show that it was not a gift. Defendant 

Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch), as trustee, did not

participate in this appeal. We vacate and remand.
2

The trial court found the following facts. Cohen met Raymond when

Raymond began dating Cohen’s stepdaughter, Molly, whom Raymond 

eventually married. Cohen owned a successful scrap metal company and 

offered Raymond a job. Cohen assigned Raymond the company’s “tough dirty 

jobs,” which Raymond successfully performed. Cohen soon regarded Raymond 

as one of his most valuable assistants.

In 2006, Cohen sold his company to a corporation named Schnitzer. 

Schnitzer gave Cohen and Raymond three-year employment contracts. Both 

were also constrained by noncompete agreements. Raymond’s agreement was 

set to expire after six months, but Cohen’s was to last for a number of years. 

The pair quickly grew restless at Schnitzer, and began to discuss new business 

opportunities. These discussions resulted in several trips, including a trip to 

Germany, to observe other scrap metal operations. During these trips, Cohen 

and Raymond frequently spoke about investment ideas.

Cohen knew a broker and private wealth manager at Merrill Lynch, and

Cohen testified that he wanted to help Raymond learn about investment 

through that broker. To set up an investment account, Merrill Lynch required 

a minimum deposit of $250,000. In January 2010, Cohen deposited this 

amount into an account in Raymond’s name. Cohen testified that he 

considered the money to be “seed money” for a business that he planned to 

open with Raymond. Although Raymond testified that he never intended to go 

into business with Cohen, the trial court found that “the parties had decided to 

enter the recycling business together . . . in some fashion after Cohen’s noncompete [agreement] expired.”

In the fall of 2012, Raymond and Molly decided to divorce. Raymond 

then withdrew $50,000 from the Merrill Lynch account, which he used for 

“personal purposes.” Upon learning of the divorce and withdrawal, Cohen 

demanded that Raymond repay him the $250,000, and then sued Raymond in 

superior court. Cohen claimed that the money was a loan, and that he was 

entitled to repayment with interest at 5% or 6%. In the alternative, Cohen 

claimed that Raymond had been unjustly enriched, and that he was entitled to 

restitution.

The trial court conducted a bench trial on November 18, 2013, and 

received post-hearing memoranda from the parties. In his argument on unjust 

enrichment, Cohen suggested, for the first time, that the $250,000 was a 

conditional gift. The condition, the trial court later determined, was that 

Raymond use the $250,000 toward a joint business venture with Cohen. 

According to Cohen, when Raymond withdrew the money, he violated that 

condition. On January 7, 2014, the trial court ruled that the $250,000 was a 

conditional gift and ordered restitution.
3

Raymond moved for reconsideration, asserting that the trial court had 

“decided the case on a theory Mr. Cohen had never pleaded.” Raymond argued 

that, if Cohen had included the conditional gift claim in his original complaint, 

Raymond would have engaged in additional discovery and presented additional 

evidence to refute it. On February 28, 2014, the trial court granted Raymond’s 

motion and set aside its January order.

The court conducted a second bench trial on October 14, 2014. Cohen 

testified again, insisting that the $250,000 was a loan. When asked about gifts 

on cross-examination, Cohen stated that “[a] gift is a gift,” and that he had 

never made a gift with strings attached.

Following the second trial, the trial court issued its order on November 4, 

2014. First, the court found that the parties did not intend to enter into a loan 

agreement. The court then applied a “weak” presumption that Cohen had 

given Raymond the $250,000 as a gift, placing on Cohen the burden of proving 

the transfer was not a gift. Finally, quoting Cohen’s testimony that “[a] gift is a 

gift,” the court found that Cohen had not met his burden, and that the 

$250,000 was an unconditional gift. Cohen appealed.

We begin with the trial court’s application of the “weak” gift presumption. 

Whether to apply a particular presumption, and thereby place the burden of 

proof on a particular party, is a question of law, which we review de novo. Cf.

Estate of Abraham v. C.I.R., 408 F.3d 26, 35 (1st Cir.) (“We review the 

allocation of the burden of proof, a question of law, de novo.”), amended by 429 

F.3d 294 (1st Cir. 2005). We hold that the gift presumption does not apply to 

transfers of property solely to in-laws. We also clarify that, although a “weak” 

gift presumption may apply to transfers from parents to their children and inlaws jointly, no such presumption applies when, as here, the transfer of 

property was for an in-law’s sole benefit. Thus, we conclude that the trial court 

erred in applying the gift presumption. Finally, we acknowledge Raymond’s 

argument that, without the gift presumption, he would still satisfy his burden 

of proving that the $250,000 was a gift. However, we leave this argument, 

along with Cohen’s breach of contract and unjust enrichment claims, for the 

trial court to address on remand.

In applying the “weak” gift presumption, the trial court relied upon 

Chamberlin v. Chamberlin, 116 N.H. 368, 370-71 (1976). There, we discussed 

the presumption in a case in which a mother and father took title to a piece of 

property along with their son and daughter-in-law as joint tenants, and then 

sued to “impress a resulting trust . . . and for a decree that [the] real estate 

[was their] sole property . . . .” Chamberlin, 116 N.H. at 368-69. Cohen argues

that Chamberlin should be distinguished from the instant case because, 

although in both cases an in-law was “involved” in the conveyance of a property

interest, the daughter-in-law in Chamberlin, unlike Raymond, was not “the 

sole grantee.” We agree.
4

At the outset, we note that many of the gift presumption cases cited by 

both parties, including Chamberlin, deal with claims to impose resulting 

trusts, not breach of contract or unjust enrichment claims like Cohen’s. 

Neither party comments on the differences among these kinds of claims. But, 

because we hold that the gift presumption does not apply in this case, we need 

not determine, as a general matter, whether the presumption applies to claims 

of breach of contract or unjust enrichment. Cf. Hornyak v. Sell, 629 A.2d 138, 

140-41 (Pa. Super. 1993) (questioning whether the gift presumption applies to 

a breach of contract claim).

Generally, the burden of proving that a transfer of property is a gift is on 

the grantee or the party who asserts that a gift has been made. Bean v. Bean, 

71 N.H. 538, 541 (1902); 38 Am. Jur. 2d Gifts § 79, at 836 (2010). However, 

we have held that “[a] transfer of property between family members creates a 

rebuttable presumption that a gift was intended.” Murano v. Murano, 122 N.H. 

223, 228 (1982). This “presumption is strongest when the grantee is the wife of 

the payor or a minor child[,] . . . less strong in the case of an adult son and 

weaker when a daughter-in-law is involved.” Chamberlin, 116 N.H. at 371 

(citations omitted). In Chamberlin, we described the presumption in the 

context of the transfer of a piece of property held in joint tenancy by two 

parents, a son, and a daughter-in-law, not a transfer of property to a daughterin-law alone. See id. We noted in Chamberlin that the daughter-in-law was

“involved.” See id. She was “involved” because she was a joint beneficiary of a

property interest along with the parents’ own child. See id. Chamberlin

therefore offers little guidance about the presumption’s application in cases, 

like this one, that involve a transfer of property exclusively to an in-law.

Three reasons justify limiting the gift presumption to transfers of 

property between or among close family members. The first is “common 

practice.” See R. Chester & G. Bogert, Trusts & Trustees § 460, at 455 (3d ed. 

2005). Parents routinely make gifts to their minor and adult children. See id. 

at 455, 461-65. Many of these transfers occur without formalities; frequently 

there is no accompanying documentation reflecting the parent’s intent to make 

a gift. But, because of their routine nature, it is usually safe to presume that 

transfers of property from parents to their children are intended as gifts. This 

presumption is, of course, rebuttable. Murano, 122 N.H. at 228. When the 

presumption is rebutted, then the burden shifts to the parents to show, by 

words or actions, that they did not intend to make a gift. See id. But gifts from 

parents to in-laws, who are the sole beneficiaries, are not similarly common. 

The presumption of a gift in such a case is, therefore, not warranted.

Second, limiting the gift presumption to transfers between or among 

close family members makes it easier to apply. Raymond argues that the trial 

court’s application of the presumption was correct because, given the parties’

personal history, Raymond was “like family” to Cohen. According to Raymond, 

“Cohen hired [him], trained [him], mentored [him], [and] traveled with [him].” 
5

In other words, Raymond urges us to rule that the gift presumption’s 

application depends less upon the parties’ actual familial relationship, and 

more upon the grantor’s particular affection for the grantee. We decline to do 

so. If affection were the measure of the gift presumption’s strength, the 

presumption may extend well beyond in-laws to close friends and other more 

distant relations.

Alternatively, Raymond urges us to uphold the gift presumption’s 

application here because Raymond, as Cohen’s son-in-law, was the “natural 

object of Cohen’s bounty.” The natural-object concept is generally associated 

with the four-part test for determining a person’s capacity to make a will. See

Restatement (Third) of Property § 8.1(b), at 106-07 (2003). It also appears in

Restatement (Third) of Trusts § 9(2) at 124 (2003):

Where a transfer of property is made to one person and the 

purchase price is paid by another and the transferee is a spouse, 

descendant, or other natural object of the bounty of the person by 

whom the purchase price is paid, a resulting trust does not arise 

unless the latter manifests an intention that the transferee should 

not have the beneficial interest in the property.

(Emphasis added.) But the natural-object concept is as expansive as the 

affection rationale discussed above:

Relatives by affinity do not take by intestacy but could be counted 

as natural objects of a testator’s bounty in the case in which the 

testator was close to them . . . . The natural objects of the 

testator’s bounty might [also] include nontraditional as well as 

traditional family members.

Restatement (Third) of Property, supra § 8.1(b) cmt. c at 108. Because the

natural-object approach, like the affection approach, is too uncertain a 

standard for application of the gift presumption, we choose not to adopt it.

Finally, we note that other states have declined to extend the gift 

presumption to property transfers involving in-laws. See, e.g., Ryan v. Ryan, 

267 So. 2d 700, 702 (Ala. 1958) (“The only relationship which the evidence 

shows to have existed between Lydia Roberts, deceased, and the appellant was 

that of mother-in-law and son-in-law; no presumption of a gift therefore 

arises.”); Jocoy v. Jocoy, 562 S.E.2d 674, 676 (S.C. Ct. App. 2002) (“In our 

view, the better approach is that no gift is presumed to a son-in-law or 

daughter-in-law.”). Raymond cites four out-of-state cases that apply the gift 

presumption to transfers of property to in-laws. But of those four, two concern 

gifts from parents to children and in-laws together and thus are 

distinguishable from the instant case. See In re Marriage of Kendra, 815 

N.E.2d 22, 23-26 (Ill. App. Ct. 2004) (applying the gift presumption to a 
6

transfer of a “40-acre tract of undeveloped land” from parents to a daughter 

and son-in-law jointly); cf. Hornyak, 629 A.2d at 141 (finding that “even if [the 

presumption] did apply, it was rebutted,” where parents transferred $5,000 to 

a son-in-law for use toward a down payment on a home for both the parents’ 

daughter and the son-in-law). The other two cases involve gifts to in-laws 

alone. See Somer v. Bogart, 749 S.W.2d 202, 203-04 (Tex. App. 1988); 

Exadaktilos v. Cinnaminson Realty Co., 400 A.2d 554, 558 (N.J. Super. Ct. 

Law Div. 1979), aff’d, 414 A.2d 994 (N.J. Super. Ct. App. Div. 1980). For the 

reasons stated above, we do not find these decisions persuasive.

Here, Raymond was Cohen’s son-in-law. Thus, the gift presumption 

does not apply, and the burden should have been on Raymond to prove that 

Cohen intended to give him the $250,000 as a gift. We, therefore, vacate the 

trial court’s November 2014 order and remand for further proceedings as the 

trial court deems necessary, including consideration of the evidence relating to 

Cohen’s breach of contract and unjust enrichment claims absent the gift 

presumption.

Vacated and remanded.

DALIANIS, C.J., and CONBOY, J., concurred.