Hello and welcome to Psych Central!

I agree with Rose. I think your sis definitely has some emotional problems and your parents are burying their heads in the sand. I would try to avoid her as much as possible. You might consider telling your daughters (depending on their ages) that their aunt is having a lot of problems. I honestly think they are right to be scared of her. I would be!

As far as getting over it, I also agree that you need to consider talking to a therapist about it all. You can get your feelings out and likely get some insights.

In the meantime, work hard to keep remembering that your sis is ill.