Illinois Real Estate Practice Exam 2025 - Free Real Estate Practice Questions and Study Guide

The act of depositing earnest money into an escrow account to protect against accusations of mishandling funds is best described as commingling. Commingling refers to the improper mixing of funds, typically involving mixing personal funds with client or trust funds. However, in the context of using an escrow account, the objective is to keep those funds separate from the agent's or broker's personal funds, ensuring transparency and accountability.

When earnest money is placed in escrow, it shows a clear intention to maintain a professional boundary in handling funds. This step helps ensure that the funds are safeguarded and appropriately managed according to the terms of the real estate transaction. By doing so, it mitigates the risk of potential disputes regarding the handling of those funds, ultimately protecting both the buyer and seller in the transaction process.

In contrast, the other terms listed, such as embezzlement, money laundering, and forgery, involve illegal or unethical actions concerning financial wrongdoing and misrepresentation, which fall outside the scope of this specific situation.