I appreciate the input. As I said, I'm not worried about being able to log the time, I'm not worried about him screwing up the airplane (I'm talking about my dad, I'm more worried about his well being)and I trust his instructor that he knows what he is doing enough to fly on his own. I also trust my own abilities from the right seat.
This is a bonding thing for me and my dad. I always understood it was legal but wanted to be sure. I am assured now after the comments here and in further research that it IS legal as long as I am responsible as PIC, pay my share, and everything is logged properly. That was my concern.
As far as the points you bring up, as PIC I am aware of airspace and safe landing conditions, I would always take the controls to make sure regulations are not broken and metal is not bent. If something does happen I would be responsible for that and I would accept it like I would any other flight where a reg was busted or metal was bent.