This is something of a grey area. You must report most asset transfers to the Medicaid agency, and the transfer will usually cause a period of ineligibility for benefits. You could make an argument that the transfer of a noncountable asset does not need to be reported or, if reported, does not give rise to a penalty. This argument would not work in every state, but it could be that it is a common practice in your state. You will have to follow the advice of your local elder law attorney who will know how the rules are applied where you live. To find an attorney near you, click here.