You have a problem. If there is no durable power of attorney for him, you will have to go to court to have a conservator/guardian appointed. This will take time and money. Secondly, remember that by making a lifetime transfer the new owners will take a carryover basis in the home and not a step up in basis to the date of death value. This transfer will end up costing your family more in income taxes. You need to meet with an estate plannerelder law attorney in your area to go over all of these and other relevant issues to determine if these transfers make sense and even if they can or should be done.
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This is an unfortunate position to be in for the reasons outlined above. Most likely you will need to obtain a guardianship to be able to do anything with your brother's property. Guardianships are usually quite expensive. First, I would be certain that your brother does not, in fact, have capacity. Dementia comes in many shades. I have handled cases involving "mild dementia" where the person was found to have possessed sufficient capacity to dispose of her property. For a relatively small fee an attorney could guide you through this process to determine whether your brother has capacity and to avoid later challenges to the transfer.
Hope this helps. Remember, this advice is only based upon what you've written here. Consult with an attorney who can give you advice based upon the totality of your circumstances. This is intended only as general advice.
It is very important that you consult with an attorney in your jurisdiction about this matter. It very well may not be a good idea for your brother to transfer his property to his son during his lifetime. If it is necessary, then you should speak with an attorney regarding a guardianship if your brother did not have a power of attorney, but it is important to keep in mind how many different factors (tax ramifications, medicaid, etc.) come into play when dealing with a scenario like this.