can last surviving adult child heir ignore living trust and make new will?

I assume that the surviving brother was the successor trustee and was able to deed the property to himself.  I also assume that the trust did not give the house to whichever brother died last, and that the trust had no "powers of appointment" that could be exercised in favor of specific grandchildren.  If my assumptions are correct, it sounds like you have a breach of trust by the surviving brother in his fiduciary capacity as trustee.  This wrongful conduct can be the subject of a petition to the probate court in the county in which the surviving brother lives (where the trust is being administered).

The only person who can make a will is the one for whom it is for.  Another person cannot create a new will for a deceased person or for a person who is 'not of sound mind'. If there is a valid living trust that states how the assets should be distributed, those directions must be followed. It sounds like you have a 'contested trust' matter and need the help of an attorney who handles contested matters.  I would suggest that you discuss this matter with an experienced estate planning attorney who handles contested trusts.