You are being very prudent to make sure that your parents have Wills and Durable Powers of Attorney that are in order. They should also have advance care directives for
You are correct that if they were to try to protect their home and assets from being considered in a future determination of eligibility for Medicaid should one or both of them have to go into a nursing home, they would have to have had the trust in effect for five years before either would be eligible for Medicaid.
However, you also are correct that there is a caregiver child exception within the Medicaid rules that permits people to convey their home to a child who has lived with them and cared for them for the two years preceding their going into a nursing home without any disqualification.
It is not necessary to do the transfer of the home to your brother at this time. Neither of your parents may need to go into a nursing home and to transfer the home to your brother at this time would not appear to be what your parents would wish to do now. However, it will remain an option in the future so long as your brother lives with them and aids in their care for the two years prior to one or both of them going into a nursing home. A letter from their physician usually is sufficient to indicate that his care enabled them to stay home rather than go to a nursing home earlier.
I suggest you contact an elder law attorney to discuss this in detail, but think that you should be able to protect the home even if both end up in a nursing home.