The parents asked her if they could use it and the dad said that although she was "a little hesitant at first" she agreed they could have it as she "wasn't planning on having children soon and would probably come up with more names later".
But just days later the sister-in-law made a stunning demand, asking them to change the baby's name.
"A couple days ago, my wife's sister found out she was pregnant.
"We were really happy for her, but then they came over to talk and asked us to change our daughter's name because she wanted to use it for her baby.
"We have been calling my daughter Freya for the last week and a half, and we already feel pretty attached to the name, plus she already said we could have it.
"So we asked her if she could just use a different name and she got mad and said she had the name picked out since she was 15.
"We feel kind of bad but she doesn't even know if the baby will be a girl."
Unsure of what to do, the father reached out on social media for advice, with hundreds of people weighing in on the complex issue.
One person supported the father, writing: "If she didn't want you to use the name, she shouldn't have suggested it."
Another said: "Changing a name after the baby is born is an ordeal. If she feels that strongly about it, it's not that big of a deal to have two kids in the family with the same name."
Others weren't so kind, with a number of people saying the sister-in-law's hesitation should have been enough to choose a different name, but sympathised with both sides.
"You stole the name."
Another wrote: "You knew she really wanted that name. She was a fool for telling you the names she loves. If the baby is already born, it's unreasonable to ask you to change her name now."