I think it would be different if it were a first name... not middle name.
I also agree with what some of the others have said, maybe just let her know that you like it and may use it
Yeah if you love it so much, then definitely consider using it. If you decide on it, just mention it to your sister so she doesn't get surprised. You never know, she might feel flattered that you're using it!
My next door neighbour loved my DD1's middle name and just asked if I minded if she used it for her DD2. I was fine with it - I see them just about every day, the girls are all in CC together so I think we are closer than cousins in terms of the amount of contact the girls have. Funnily enough I don't see her DD2 as having the same middle name as my DD1 - they are individuals so give a different spin to the name if that makes sense
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