Can my brother's daughter inherit the estate?

Generally, your brother's Last Will and Testament will control who inherits from his estate. If he has no will, Indiana law will give half to his spouse and the remaining half to be divided equally by his children. In either case, the wife can decide to disclaim her interest. Ultimately, it will depend upon what his will says, if there is one. There will likely be inheritance tax to pay, possibly estate taxes, but it is unlikely that any gift taxes will be owed.

You should retain a probate attorney for legal advice and assistance. If required, that attorney will open an administration on behalf of your deceased brother, pay his debts and taxes, and should properly dispose of his assets.