What should I do if dad wants to take his daughter out of his will but she will contest and create extra stress?

Stay out of it. From what it sounds like your dad physically abused your sister when she was young (using a belt is physical abuse) and i understand why she wants nothing to do with him.

You can lightly broach the subject with your sister - but be prepared for her to decline. My dad (ignored me - i'm a girl) was a real s$it to my brother - they were very different personalities and dad would not accept my brother but tried to change him every day until he moved out at 18. Mental and physical mistreatment. He always acted surprised and hurt that my brother had nothing to do with him for 30 years (lives in small town and wanted sympathy). As my dad's mind began to fail - he wanted to see my brother - and my brother refused. He felt dad only wanted to do this so HE would have some sort of closure -but no acknowledgement of his mistreatment of my brother - so brother said "pppfffttt!!!"

Parents who mistreat their kids do not have any sympathy from me. People in my small town would say "oh, your dad feels so sad and confused that your brother won't see him" and i would say "why is he confused? I'm not surprised my brother won't have anything to do with him, he physically and verbally abused him" Which shocked people and really torked my dad "what will people say" but it was always about my dad and he didn't give a hoot about anyone else.

You reap what you sow. So deal.

You're right, it's his money. Maybe your sister won't want anything to do with him or his money when he passes. I'd stay out of it. When the time comes, if you feel your sister should have some of the inheritance, share yours.
Have you talked to your sister about your dad and his wanting to make amends? It might be very beneficial for your sister.

My parents didn't want my brother in their will and their lawyer said as long as he was left $1, he couldn't contest. They left him more than $1, but the bulk was to be divided among us girls. (my brother was an addict and stole from them.)

Back then, it was not uncommon for children to be 'switched' or have a belt used on them. I remember not liking it and I straightened out. My brother went on with his bad behavior and stole their rent money. My DH was raised on a cotton farm and they had to go out and bring back a switch to be used on them.

That was then - this is now. If your sister won't even answer your dad's phone calls, he has every right to exclude her from his will. But to avoid her contesting, she should be in it for at least $1 according to lawyers.

I think your sister will find that it is difficult in "real life" to contest a will. (By "real life" I mean you see this in movies but it does not work in "reality")
Your sister will have to show that your Father was incompetent or coerced when making the will. 
And if I am not mistaken if she is left even a token bit in the will and she contests it and your Dad was found competent when the will was drawn up she will get nothing.
I would stay out of this "feud" and see what happens. If your Dad is doing alright now... wait....I am sure that if he shows a real decline in health your sister may come around. Not a guarantee but it may happen. A close member of the family did not see my Husband for 3 years but "came around" the last 2 weeks of his life. For that I am grateful.
If it happens in your case great, but if not, this is not on you.
You have NO control over others action and you should not allow this to add to any type of stress.

Oh..and a personal comment.  Your sister was abused.  ..as were you if you also got hit.
(As was I and millions of others that grew up with parents that thought spanking, getting hit with a belt, a spoon or any other object was a proper form of punishment)  
At her age to still be feeling the brunt of this the beatings must have been extreme or there may be something else that only she is aware of.  I hope she is able to talk to someone about this and get resolution of some sort. 

I think you can have it written in the will that if anyone contests the will...and loses their case....gets absolutely nothing...even what they were promised originally ....it might put a stop to someone thinking of creating problems ...and more stress and discord to the truly grieving family members.

My Moms lawyer explained that removing my brother would possibly set it up for court cases while he contested it.

What was done....Mom put me as joint owner on all her accounts .... by passing the will.

Just a side note ...I've done counseling for unforgiveness towards an abusive parent...it was for myself I had to lay that burden down...I still see her as a narcissist..negative...judgemental ...and spend time with her rarely...and visit with other people around...without Gods healing and Christian counseling..I couldn't do it. And I doubt your sister wants your dads money...I could be wrong...she just doesnt want him in her life....and I can understand that..

Do not even worry about the money - she has the right to exclude him from her life, as he has the right to exclude he from his will. It is not the best for either of them.

Talk to your sister, remind her that this may be her last time to allow him an opportunity to apologize....assuming that is what he intends.

If that does not work, explain to your clear headed father that cutting her out is not the best way for making amends for his past actions. Seems like yet another harsh punishment. Instead encourage him to write a letter, and leave her in the will.

Lastly, as someone else suggested, you can always share your portion as a sign of love and solidarity with your sister.

There is little more to this than I let on. My dad was in the hospital with pneumonia 3 years ago. Before my dad got sick, he lent my daughter and husband $11,000.00 for a down payment on a house as they were renting at the time and had two small children. My daughter was always close to my dad and he walked her down the aisle at their wedding. My dad really wanted to help them out and it was under the promise that all the money would be paid back in a year, which it was. While my dad was in the hospital back then, my sister and husband went to his assisted living to get dad's mail. They noticed a bank statement and asked if they could take it home to look at it. My dad agreed and let them, not thinking about the money that he had lent my daughter because he didn't want them to know. When they found out, they were pretty upset about it and said my daughter was "taking advantage of an old man!" When I told them it was simply a loan, they were worried about the interest. My brother-in-law then took it upon himself to take my dad to his notary and have him resign his Will to say that my brother-in-law will take over as Enduring Power of Attorney and my sister will be the Executor. Neither of them bothered with dad before then but were quite interested in his Will. They sent me nasty e-mails and I just had enough and stopped any communication from them. So we haven't spoken for over 3 years now.

Greed....it's ugly...I'm with you...too much drama! Who needs it!! I just don't get how people can be so ugly!