I have the following to opine :-
1. Property inherited from paternal ancestors (in this case father) is ancestral property in the hands of a person vis-a-vis his own children.
2. As a direct result of which such children - i.e your daughter and brother's son have equal shares with you from the point of their birth. This means that the 1/3rd released by your brother would be effective only the extent of his shre in the said 1/3rd i.e 1/6th.
3. His son has 1/6th with him, to alienate which Karta of family (his father) can alienate only for legal necessity, benefit of estate until he reaches majority.
4. In the fitness of things - permission from local magistrate would also be required from his natural/legal guardian (father) and the court may or may not allow the relinquishment of his share depending upon benefit to minor from the transaction.
Feel free to talk !