Seller's father in nursing home on Medicaid, best way to handle

[Eric F.]

I am under contract to purchase a house. I have been dealing with it for 3 months. I have only dealt with the seller's son.

The story is the father is on Medicaid and in a nursing home. When we wrote out the contract (the son and I) he took it to his father to sign. I have been told the proceeds are to go to the son to help pay for his father. Their plan is to put the house in a trust and make the son the beneficiary. There is a lot going on here which is making me a bit hesitant. 

The son now wants the contract rewritten without his father's name, only the trust. I don't think I am going to do this. What should I do? 

There is a city housing loan to fix up the house which is now in foreclosure since it is no longer the father's primary residence. The son said the city housing lady called him saying a few things in the contract needs to be changed, but won't give me her number. I want to talk to her.

We asked if he had power or attorney for his father and he said no, then got kind of defensive about why would he do that?

I have been dealing with this since October. Two times the son disappeared on me for 3 weeks only to call and be like "Eric we need to get this done now!" 

How should I handle this Medicaid thing? Whatever they want to do with the money is their business, but I really do not want to buy the house without the father's name on the contract. 

My plan is to figure out exactly what I need to do to make sure I do not participate in any shady activity and tell the son it is this way or the deal is dead. They can do whatever trusts or money shifting they want, but I'm not helping. They are only going to get like 7k in proceeds when the dust settles anyway which is under the taxable gift amount from the IRS.  If it makes a difference the deal is pretty thin for me also. It is not terrible but if I knew all this trouble was coming when my phone range I would have hung up hah

Can I just do a contract with the father and put as part of the contract the proceeds are to go to his son? 

thoughts?