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Dear Customer - You can certainly claim half of any money in the joint account as yours. Your sister can prepay her funeral costs with part of her half as this would be an acceptable expenditure. Since your sister's half is about $4,200 it would seem that most of it could be used for the funeral costs and you would keep your half so in essence all of the money would be protected.
I am certain you have to actually pay for a funeral as a prepaid item rather than making the funeral director the beneficiary of the estate. It has to be something that is irrevocable rather than just a beneficiary of a bank account. Medicaid is fairly strict in their rules so you must divest your sister of her assets before she will be eligible.