I have a dilemma, we have a four-year-old and are expecting baby #2 in September. The other night I brought up the subject of who should raise/take care of our children should we pass away while they are still very young. My spouse brought up the point that it is very important that the children have as much stability and familiarity in their life (i.e., live in their home, sleep in thier beds, etc.). So having someone move into our home would be ideal, but unlikely, as people have their own lives to carry on with. I suggested my brother and his family being more than capable and ready to do this for us, but they live in another city, and my spouse thinks uprooting children would be catastrophic. I say not if they are very young. Psychologically what is best for children of varying ages when it comes to either up-rooting them or not; assuming the new home would provide great care and comfort and a fulfilled upbringing?
Thank goodness you are likely to both survive to be grandparents. Planning for disasters is a good idea, though. Place is important to children. However, people are likely more important. Any loss of parents, especially both parents, would be very difficult for your children. It would be less traumatic if they knew their new caregivers.
I assume they know and like their uncle and aunt and any cousins. You could lessen the impact of your children moving if they were able to take important possessions such as teddy bears or perhaps their beds. You could discuss this with your brother and his wife.
Your wife has strong and heartfelt beliefs. It is important for you to respect her beliefs and work together to find a solution. She may have some concerns about your brother and his family. Take the time for the two of you to think this through. Come to a mutual decision.