S.B.
If the cat was happy there and your sister-in-law is willing to take him....let her have him.
It's not like you'll never see him again.
A friend of mine took in two cats for a friend that was moving away and couldn't take her cats. Those cats are spoiled and in heaven, believe me. Cats can be really fickle. They tend to care about themselves to an extent.
I think if the cat is happy, what would it hurt to let it stay longer?
Cats don't always do well with very energetic children. It can make them nervous.
I think you should consider it. You'll miss him, but it's a win-win for now.
Best wishes.