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Hi, I'd like to help you with your question.
It sounds like your brother in law is in a dysfunctional relationship with his father. Your father in law is using guilt to keep your brother in law in a cycle of abuse that your brother in law feels powerless to remove himself from.
It is difficult for you and your family because as long as your father in law and brother in law are consenting adults, there is little you can do legally to intercede.
There are some things you may be able to try, however. One, if you have the support of other family members, you can try an intervention with your brother in law. An intervention is usually reserved for someone who uses alcohol and drugs and cannot see the harm they are doing to themselves or family. But in your brother in law's case, you could use an intervention to help him see that he is not only hurting himself by supporting his father, but he is hurting his father as well. Here is a guide on how to do an intervention:
You and your husband could also talk to your brother in law about the concerns you have regarding his health (stress level, etc) and the fact that further contact with his father could land him in legal trouble. Try including a non family member when you talk with him such as a pastor or other trusted individual that you feel your brother in law respects. Although he may not listen to family, he may listen to someone who is outside the family.
If you hear first hand any threats your father in law has made, you can always report him to the police. The police may not be able to do anything right now, but a report will help back you up if something does happen in the future. Encourage any other family members who are confronted by him to do the same.
Have a family meeting to discuss your options. Even if you do not come up with any viable solutions right now, you set the stage for supporting one another, you'll get everyone on the same page and you may get everyone thinking about solutions to this problem.
Here are some resources you can try as well:
Hidden Victims Hidden Healers: An Eight-Stage Healing Process For Families And Friends Of The Mentally Ill by Julie Tallard Johnson
Out of Our Minds: How to Cope With the Everyday Problems of the Mentally Ill : A Guide for Patients and Their Families by Sascha Garson
How to Live With a Mentally Ill Person: A Handbook of Day-To-Day Strategies by Christine Adamec
You can find these books on Amazon.com or your local library may have them for you.
I hope this has helped you,