Which statement is true regarding the funding of irrevocable funeral trusts?

The statement about irrevocable funeral trusts that is accurate is that these trusts should cover prearranged funeral services. An irrevocable funeral trust is specifically designed to set aside funds for the purpose of paying for funeral expenses. By prearranging funeral services and utilizing these trusts, individuals ensure that the funds will be allocated for that specific purpose, regardless of rising costs over time or the individual's financial status at the time of death.

These trusts help eliminate the financial burden on families and can also provide peace of mind for individuals who want to plan for their own funeral expenses in advance. The funds in an irrevocable funeral trust are generally protected from creditors and typically cannot be accessed for any purpose other than what was intended—specifically the prepayment of funeral services.

Other statements about irrevocable funeral trusts, such as their funds being usable for any purpose, the requirement of fixed amounts, or accepting only cash contributions, do not accurately reflect the rules and regulations surrounding these financial instruments. The focus and legality of irrevocable funeral trusts lie in their specific goal of funding funeral services, which reinforces the correctness of the chosen answer.