When applying for Medicaid, the government will presume that any transfers you made for less than fair market value in the last five years was done with the specific intent to qualify for Medicaid. Even if that was not your intention, Medicaid will treat the transfer as a gift. Under Medicaid rules, amounts gifted are treated as if they were still in your possession on the day you otherwise qualified for Medicaid and you will be penalized as if that cash was still in your bank account.For example, Mary gave $15,000 to her grandson to help him with college. Three …