E.S.
Dear P.,
Please read through completely - don't stop...
Your sister says you aren't raising your kids, she and your mom are. You say that your sister doesn't watch her own kids, tries to get away, yells a lot, and her husband does more for them than she does.
Either your mother misunderstood, you are not perceiving things correctly, or your sister is lashing out for some unknown reason.
Taking you at your word, I would think it is much more likely that your sister is jealous. I know of no other relationship, from the number of women I have spoken to who have difficult sisters, where jealousy can be such a motivating factor.
Does your sister seem happy in her marriage? If your fiance' seems more wonderful than her husband, perhaps she just doesn't want to be around him for that reason. Perhaps your relationship, your attention to your own kids, etc. makes her feel inadequate or makes her realize her own unhappiness.
I wouldn't confront your sister with what your mom said since you said your mom lives there. If you wait for an opportunity, I'm sure she'll let something slip and then you can question her directly "what did that mean?" "sometimes I get the impression that..." approach it more indirectly.
Good luck to you, though. It sounds like your sister is unhappy and if your life is going well, it may make her feel better to think that it's only because she's so involved in raising your kids...