At L is for Lawyer, our mission is simple: to expose the hidden traps in real estate transactions and protect consumers from systemic failure. Among the most dangerous—and least understood—pitfalls is the digital earnest money platform known as TrustFunds. Despite its veneer of efficiency, TrustFunds poses an unacceptable risk to home sellers and buyers alike. We do not—and will never—endorse its use.
Here’s why.
1. TrustFunds Enables the Equitable Conversion of Property Without Payment
In real estate, equitable conversion means that once a purchase agreement is signed, the buyer is treated as having a form of ownership interest in the property—even before closing. But this legal fiction depends on one critical condition: payment of earnest money to secure the buyer’s intent.
TrustFunds erodes that safeguard. By allowing buyers to initiate payment attempts that never settle, while permitting the use of false or forged confirmation screens, TrustFunds creates the false appearance that earnest money has been paid when it has not. That fiction can lead to the conversion of legal rights in a seller’s property—with no money down. It is a blueprint for abuse.
2. The Platform Creates a Legal Illusion of Compliance
TrustFunds enables agents, brokerages, and even legal counsel to represent to courts, title companies, and opposing parties that earnest money has been submitted—when in fact no funds ever settled in escrow.
This is not hypothetical. In a recent case, a buyer’s agent used TrustFunds to claim compliance with the earnest money obligation, and a brokerage cited that “payment history report” in litigation. No actual money ever changed hands. The entire contractual enforcement process was activated based on a phantom transaction.
The result? Months of legal costs, reputational damage, and leverage against the seller based on a lie.
3. TrustFunds Shields Itself While Exposing Everyone Else
When earnest money fails to settle, TrustFunds does not notify the listing agent, the seller, or the title company. It places the burden of discovery on parties who were never part of the platform in the first place. And when challenged, TrustFunds has disclaimed responsibility, calling itself a mere “delivery service.”
But that delivery service is embedded in nearly every MLS listing in regions where brokers have signed on. In other words, you cannot opt out—but TrustFunds can opt out of liability. That’s not neutral technology. That’s exploitation.
4. The Legal Consequences Are Staggering
Failure to collect earnest money is not just a contract breach. It’s a breakdown of the checks and balances that protect property rights. When platforms like TrustFunds enable that breakdown:
- Buyers can claim performance under the contract without having paid.
- Sellers can be dragged into court under false pretenses.
- Courts may accept filings or arguments based on misleading TrustFunds documentation.
- Third-party professionals—agents, lawyers, even judges—can be misled.
The cost isn’t just transactional. It’s constitutional.
L is for Lawyer Will Never Use or Endorse TrustFunds
We take a hard line: no use, no endorsement, no tolerance for platforms that facilitate deceptive practices.
If you’re a seller: Demand written confirmation from your agent that funds have cleared escrow—not just a TrustFunds confirmation screen.
If you’re a buyer: Refuse to use TrustFunds unless you are provided with independent, verifiable proof of settlement.
If you’re a broker or agent: You are not insulated. Failing to verify whether the funds actually cleared puts your license and your client’s rights at risk.
Reform Starts Here
It’s time to demand transparency, accountability, and real-time visibility in earnest money transactions. Until then, L is for Lawyer will continue to expose the systems that place profit over truth and efficiency over ethics.
TrustFunds is not safe. It is not secure. And it is not trustworthy.
