Family

What are you supposed to do when you are uncomfortable around certain members of your family. There have been a couple things lately that have caused tension between my sister and I and I am not sure what to do.
Yesterday I went to pick my daughter up at her school (my niece goes there as well) and ran into my sister. I started talking to her about things at work and life in general, it was awkward, made ME feel awkward then the conversation just kind of dropped off and we all walked away.
I really don't know what to do.
A couple weeks ago we were at their house for dinner, when we were leaving my brother in law said to my niece "go hug your aunt" and my niece walked over to his sister and hugged her...how sad is that. My sister is pregnant again, I am worried that the same thing will happen with the new baby.
My other sister moved away last year and now it feels like I am losing this sister, only not by distance.