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My grandfather passed away in December of 2012. She received $23,000 in a life insurance policy in Jan. 2013 after he died. She cashed the check and it was never deposited so now they won’t approve her. What does this mean? Will she be penalized or will I have to find other arrangements until the 5 year look back period has passed. I really wish I would’ve known all the rules before she applied. She can’t stay alone and I’m a single mother of two and I can’t afford to stay home with her.

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I'm not good at math, but isn't the 5 years already up? I suppose she applied just before it was, huh? It might be time to consult an Elder Law attorney. (Too bad you didn't before submitting the application. But who knew?) Call your Area Agency on Aging and see if they have volunteers they can refer you to.
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Yes it fell right at the beginning of the look back period. I had no idea and didn’t do my homework on all this until after the fact
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It seems to me that you need to resubmit, yes?
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The NH has been taking care of application. They denied her one time and they resubmitted it. If she is denied this time I think I need to let a lawyer look at the denial reasoning because I haven’t even seen a denial letter.
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That would be a good course of action.

Let's hope she hasn't been gifting monies you don't know about.
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Was it put into an IRA or CD. I would worry about where the money went. Did she pay off her mortgage. If you could find out the reason, it may help.
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