Do we have to report a 1099int that my mother in law earned on a funeral prepayment and has her name and ss#?

We prepaid a funeral for my mother-in-law who was in a nursing home.  All her money went to the government for her care.  The 1099int was for earned interest on that prepayment and went toward the cost of the funeral.  Her name, my husband's name and her ss# were on it.