Estate Recovery Act requires equity on couple's home be used to pay SNF after death of 2nd spouse. In the meantime, 2nd spouse wants to sell in a J/T/R/O/S - joint tenancy right-of-survivorship state. Typically property can be sold and laws acknowledge each spouse owns 50% equity which they can invest together or invest as individuals.
Medicaid says spouse's SHARE OF assets will not count toward ELIGIBILITY for Medicaid. So spouse qualifies for SNF. Non-institutionalized spouse wants to keep 50% proceeds of the couple's equity as an individual asset. Put another way, we don't know if 100% of the sales proceeds must be paid to the state.
Estate Recovery outcomes for the spouse's 50% share realized WITHIN the surviving spouse's lifetime just isn't evident.
Really dealing with medicaid can be complicated for those with community spouse issues. See an elder law attorney asap, I would get one who is NAELA certified.