OP,
You have had a very tough time with both your mother and sister throughout your life, and yet you sound as if you have great self knowledge.
Both your relationships with them were absolutely toxic that have left their mark.
Despite lots of therapy to try and make sense of it all, sometimes it is impossible to do.
Acceptance often becomes the goal as we age.
Acceptance that we cannot change the past, cannot change those in it, acceptance that we will do out best to just move forward and live out our life as best we can.
I think @AcrossthePond55 is giving you wise counsel.
Sometimes we have to make the tough choice to leave people behind because that is what is best for US.
You are to be commended for trying to live a good life, loving and caring for your wife and daughter.
Rightfully protecting the good things in your life.
Your sister upset your wife and brought toxicity to your home.
You have every right to want to protect the next generation, your daughter, from intergenerational trauma.
These things are past on if we are not very careful.
Kindly, I would say, the most important thing for you to prioritise and protect, is your family.
Allow no one who will bring grief and drama near your family.
I am an old woman and I have known many people over the years with complicated upbringings.
With absolute truth, those that ruthlessly cut off those that would bring drama and grief to their lives, were the ones that forged ahead to create the best possible lives for themselves.
Was it always easy? No it wasn't.
Was it worth it? Absolutely yes.
The peace and calm was the prize.
Through cutting off those that would bring toxicity to their life, they had the energy and space to create a peaceful future doing their best to live a good life.
You deserve to give yourself that chance.
Your wife and daughter deserve the very best version of you, unburdened with the periodic drama that contact with your family would leave you exposed to.
Wishing you well.