Family Relationships

You need to place them together with the relationship already set as they enter the game, then use the feature to split a household (available in manage worlds) to split them apart. If you place them individually, that save won't know they are related.

I do this all the time, never start a new game without having relatives come into the game with my sims. Relationships are not preserved in the gallery unless sims are in the same household so you need to bring the family in as a group, then split them up in the game to have them live in different houses.

If you add your sim's brother now that the game is already started, you'll need to use cheats or MCCC mod to set their relationship. You can set most direct relationships (brother, sister, parent, child) this way, but for things like cousins, aunts, uncles...there are no cheats. So if you ever want those relationships brought into a new game make sure to do the one-household-when-placing thing.

In my experience, you need to place them into the world together so the sibling relationship is established. As soon as you've placed them, though, you can pause, save, and then move the brother to another household.

I'll just add him to her household first, so I can make sure they're still related. Thanks for the comments!

Only sims added as one household will be related in your save. Adding them in two goes will cancel the relation, even if they were related in CAS.