You can safely nominate your sister as the Personal Representative of your estate even though she is not a resident of Washington. Washington law ( RCW 11.36.010) provides that as a non-resident, she may serve as the Personal Representative as long as she appoints an agent who is a resident of the county where the estate is probated who can receive service of papers for her (or she may appoint the attorney who represents the estate as her agent).
Also, I'm glad to see that you are getting your estate planning in order. This is important for any parent of a minor child. I hope you are working with a knowledgeable estate planning attorney who can advise you on the proper selection of a guardian for your minor children, as well as your options for safeguarding any inheritance that your minor children could receive (since minor children cannot receive their inheritance directly). Good luck to you!
The above response is commentary regarding a general legal question. It is not intended to be legal advice specific to the reader's individual situation nor does it create an attorney-client relationship between the author and any reader. You are encouraged to contact a qualified and knowledgeable attorney to discuss your specific legal situation.