It's currently not possible to share local files with other Spotify users, with or without the Premium for Family plan. Your local files will not show up for others if you share a playlist containing them.
However, your sister can add the local files to her own account by signing into her account on the computer which has the local files stored and then following these steps to add the files to her Spotify account.
Let me know if you have any questions. Happy listening :)
NoahRock Star 7
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