I don't think its a big deal at all. I mean, its one thing if you live in the same town and see each other every single day or something. Even then, its not like they're sisters. They're cousins! I say go for it. If you love Emma, then name her Emma and don't worry about your SIL. She'll probably be a bit annoyed cuz its "her" name, but she'll get over it.
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