Is your sister's hand crooked because of an injury or has she just not learned her technique yet? In either case, if she's having extreme difficulty I would take a step back from chords entirely and have her fret notes on the high E string slowly until she is able to play with the tips of her fingers, then work your way backward through the fretboard doing the same thing. Then work on combinations of frets and strings and eventually move your way back to chords.

Failing that, maybe go to a music store and have her try various guitars? I know that when I first started I had great success with my mom's old classical, as it had a wide neck and I had very large and clumsy fingers. Go try some classicals, some acoustics, try a little bit of everything that they'll let you touch.

Also, a good guitar teacher will be able to assess her technique and will know how to keep her motivated.

-Bryan