Your sister’s behavior is NOT a sign of guilt, it’s a sign (several in fact) that your sister is a complete total narcissist and there is no amount of trusting, forgiving and making allowances that will cure her.  Your best bet is to be there for your nephew as he will always need a safe place to land that your sister can never provide.   Narcissists do not have relationships, they take victims.  And because this is a personality disorder, there is no cure.  When you try to make them aware of the behavior, only learn the language and skills to become better abusers.  And when you’re a spent, disheveled, used and abused heep on the floor of your apartment with a kid, 3 dogs and 2 cats, she will simply move on to the next unsuspecting victim and do it all over again, (thus the “new” boyfriend that she found within a week).  The best bet for you is to realize that she will never “get it” or become a better person.  Stop being an endless source of income, a place to stay, or reinforcement for her bad behavior.  Set boundaries and hold them firmly.  Otherwise, be prepared to live your future with her that mirrors your past.