Feel so bad to hear this kind of story,

yr in-law is such a jerk!!! I think PrincessGr is right, the most important thing right now is 1) don't give up child custody 2) asking for big alimony. But according to what u said, I think yr sister is not mentally clear most of the time and she will agree to give up the custody and alimony, So if u have time, I will suggest u to go there and stay with her during the court date and help her going through all this... If she agreed on the court and sign the paper, then it will be too late to do anything, and even if u do persuade her to fight now, she might change her mind in few days when her hus is constantly cheating her on the side..