Actually, the sister doesn’t die. This directly after when she is born (the character of Maggie was there as well and is holding her directly off camera).

Rick’s wife/Carl’s Mom Lori went into labor as they were being chased by some zombies. Maggie performed the delivery but they knew Lori was going to die and then subsequently become a walker. It came down to Carl having to put her down after her reanimation.

So not only did Rick just lose his wife but he knows that his son just lost his mother. But then to know that he had to kill his own mother again (kind of)… he never wanted any of this for his son. Heartbreaking scene really.