@helpsoworndown
Listen, you are not the one who is 'breaking' your family. HE is doing that himself. You are just reacting, like someone who steps around broken glass when someone else smashes a window or a vase.
And remember that divorce is commonplace these days. Chances are DD has almost as many kids in her class in single parent homes than in 'intact' homes. I'm not saying she won't be affected, but there will be children she will see daily who are settled and happy and she will 'absorb' that. Plus since this incident involved her it sounds as if she saw or heard her brother's actions so it's imperative that she be kept safe from him for her own feelings of security.
Here are your 'practical actions' as I see them;
Step one, stop talking to him about this. Stop trying to get your points across or trying to convince him to change. It's an exercise in futility and does nothing but make your anxiety worse. Just let him talk and only reply 'No' to any suggestion that you have his son in your life or in your presence (same regarding DD). Don't JADE (Justify, Argue/Apologize, Defend, or Explain your position. As the MN adage says "No is a complete sentence".
Step two, if your adult DD isn't in your complete confidence, now is the time. Tell her that you are going to leave and the two of you start making concrete plans; look for places to live, set budgets, do 'logistics'. Not only is this practical, but doing these things is a real boost in your feelings of 'positivity' and that translates to courage and action. Believe me, I know whereof I speak!!
Step three, see a divorce solicitor and SAY NOTHING. Find out about breaking the tenancy and whether the circumstances can be considered in allowing you to remove yourself from the lease. Also be prepared to give a 'snapshot' of family finances & assets to see how divorce may affect you financially, for good or ill. Ask about child arrangements in light of the brother's actions. Yes, DH will have access, but can there be a stipulation that DH is not allowed to have him around when he sees DD. Forewarned is forearmed, knowledge is power.
You can do this. Remember it's a marathon, not a sprint. But all you need to do is start moving forward.