Short answer. Yes. Under Article 863 of the Civil Code, a fideicommissary substitution is only valid if both the first heir (your brother) and the second heir (your nephew) are alive at the moment your father dies. If either one has already died by then, the arrangement does not take effect as written.
What the law says
the fiduciary or first heir and the second heir are living at the time of the death of the testator
Civil Code, Article 863 — Fideicommissary Substitution. Read the full provision →
What a fideicommissary substitution is
A fideicommissary substitution is a testamentary arrangement where a first heir (called the fiduciary) receives an inheritance but is bound to preserve it and eventually pass it to a second heir. In your family's case, your brother is the fiduciary — he inherits the land but holds it in trust, so to speak, with an obligation to eventually transmit it to your nephew. This is a recognized and valid way to structure an inheritance under the Civil Code, but it comes with strict conditions.
The survival requirement for both heirs
Article 863 states that the arrangement is valid only when the fiduciary or first heir and the second heir are living at the time of the death of the testator. Both must be alive when your father passes — not just one of them. If your brother has already died, he cannot serve as the fiduciary. If your nephew has already died, there is no second heir to receive the property. The requirement is simultaneous survival of both heirs at the moment of the testator's death. This is a firm condition, not a technicality.
The one-degree limit also applies
Article 863 also requires that the substitution does not go beyond one degree from the heir originally instituted. In a typical family scenario like this one, your brother (first heir) and your nephew (second heir) are one degree apart — parent and child — so this condition is satisfied. The one-degree rule prevents chains of substitution that tie up property across multiple generations. A testator cannot, for instance, require land to pass through three successive heirs; the law permits only one transmission.
What happens if one of them has already died
If either your brother or your nephew predeceased your father, the fideicommissary arrangement cannot take effect as written. The property would then fall into the general rules of succession — it does not automatically pass to the remaining party. What actually happens depends on the rest of the will and on how the estate is constituted. If the will contains alternative provisions, those would apply. If not, the ordinary rules of intestate or testamentary succession govern the property. This is why the survival of both heirs at the time of death matters so much: it is a precondition that validates the entire arrangement.