And also, in regard to ownership of a condo -
If it's in THEIR names, and they die, and your wife inherits it - she gets what's called a stepped-up basis. That is, if she then owns it and sells it 10 years later, she only pays capital gains on the difference between the value at the time of inheritance, and the value when she sells it. If you buy it in your names NOW, and own it for 20 years, then sell it - you owe capital gains on ALL the appreciation from the time you bought it to the time you sell it.
And yes, there's a look-back issue with transferring assets in order to qualify for Medi-cal. If they are in good health, it might pay to transfer it now and just realize they won't be eligible for medi-cal for several years (and even then they would have to spend down much of their savings first).
These are complex issues and I recommend getting good financial/tax advice around these issues before making any moves.
As for the restaurant, I agree, probably not worth that much if they don't have the books to prove it is profitable enough to warrant that price, especially if the lease will not transfer. Hiring a manager to run it for them for a good salary and just taking a small but continuing profit off the top might be better. If it doesn't make even that much money, they probably can sell it for a small amount (for the goodwill and equipment mostly).