No, YANBU, your sister is. I think you are being very generous and approaching this in a sensible way. Also, as children get older, what you send as a gift might not be to their liking, whereas with money, they can buy whatever it is they would like. I can’t understand your sisters objection to your suggestion of you sending her the money to buy a gift if she thinks that is what they would prefer - she will have a better idea of their likes and dislikes, but it sounds as if that is too much of an inconvenience for her. No, continue as you are doing.
What decade were your grandparents born?
Desperately sad story of the assisted suicide of a grieving mother
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