Idea 1) Stop calling it "creating money"/"inventing money" etc. You're just trying to help your dad get the 401K match from his company and protect yourself.
Idea 2) Simplify this thing and do it year-to-year to reduce your exposure, reduce the paperwork, and reduce risk at his death for the "deal" to go wrong. "Dad, are you getting the free money from your company in your 401K? Would it help if I gave you loan?" Then, the deal with him is that the first year after he gets the company match, he takes out everything--he cleans out the 401K. He'll pay penalties and taxes--so what? He wouldn't have anything without your help, and he shouldn't mind paying taxes on free money. Anyway, if he's 59 I don't think he'd have to pay any penalties, just taxes. (Check all of this--the IRS rules and what his company 401K folks will allow).
Input (example):
$10K loaned from you
$10K match from his company
Output ($20K):
$3 K: covers taxes
$7K: Reimbursement to you for loan. He will still owe you $3k due in one year.
$10K: Back to Dad. You and he keep the money in a joint ("AND," not "OR" signatures needed) account, it gets transferred back to his employer every month to pay for his 401K contribution (if they
must take it from his paycheck, then work some kind of "trust but verify" arrangement whereby it goes to him to reimburse him for the withheld money). If they'll take it as a lump sum, that's easier still.
After that, everything is on autopilot. At the end of year 2 he pays you back the $3K (plus interest if you want), and he just withdraws a little over 1/2 of the money in his 401K. He pays taxes on the withdrawal and uses the rest to "pay himself" every month to make up for the the 401K contribution he is making. He'll get the match. If he's happy using the same joint account you used for year one, then that's great and he won't have an opportunity to blow the money. If he can give it to his employer as a single lump sum, better yet. If he lacks the discipline to do this and blows the money, you repeat the actions from year one--give him a loan and get most of your money back right away.
None of this is optimum: He'll be paying taxes he shouldn't need to pay, and a smaller amount of money will be growing tax-deferred in his 401K. But it may be the best way to get the company money without creating a legal or paperwork nightmare or deep risk for you.
Also: If they are married, your Mom should have a spousal IRA. It can reduce their taxes. More importantly, it will be money in her name that she controls, has some protection from creditors (I think--check this) and which he can't access. She doesn't need income of her own to have a spousal IRA. If she DID get a job, she could put a lot of money into an IRA, or her own 401K. Depending on her/their income she could possibly get "free money" via the Savers Credit, etc.