What type of arrangement involves placing funds in a trust for future funeral costs?

The correct choice describes a preneed arrangement that involves setting aside funds in a trust specifically for future funeral expenses. Preneed arrangements allow individuals to plan and pay for their funeral services in advance, which provides financial protection against rising funeral costs and ensures that their preferences are honored.

In this context, a revocable trust is a key component, as it permits the individual to change the terms or withdraw funds if circumstances change. When funds are placed in such a trust, they are designated explicitly for funeral costs, ensuring that they are available when needed. Non-guaranteed contracts may also be included in these arrangements, emphasizing the financial planning aspect where the final cost might fluctuate.

This option presents a comprehensive approach to securing funds for future funeral needs, contrasting with other types of arrangements such as immediate burial agreements or prepaid funeral plans, which may not offer the same flexibility or trust-based structure.