Rita Caleo was fatally stabbed 23 times in her luxury Sydney home because she "knew too much".
She knew who killed her brother Dr Michael Chye only 10 months earlier on October 16, 1989.
The brain behind the murders, police say, was her former husband Mark Richard Caleo.
The 52-year-old faced Sutherland Local Court on Wednesday charged with plotting the murder of the two siblings through a hitman 25 years ago.
However, Mr Caleo's solicitor, Sam Macedone, told the court the accusations were based on "speculations, suspicions and assumptions".
Dr Chye, 36, was shot three times in the garage of his Woollahra home.
Less than a year later, Mrs Caleo was stabbed in the stomach in the ensuite of her Double Bay bedroom while her daughters, aged six months and four years, slept in the next room.
But before she died, police say the 39-year-old left a letter naming two suspects, including her husband, in the event of her "unnatural" death.
"Direct the investigation to my husband Mark Caleo ... he gets very desperate when he is squeezed financially," Mrs Caleo wrote in May 1990 in a letter sealed within an envelope that was stapled to her will.
Police allege Mr Caleo ordered a hitman on his brother-in-law Dr Chye, who had threatened to sue for millions owing over a property deal the two had made.
"I had the bastard on his knees. I gave him an extension. If he doesn't pay, I'll sue him for everything he's got," Dr Chye told his receptionist, according to court documents.
Mr Caleo responded by having his brother-in-law killed, police say.
But according to the accused's solicitor, the police case was weak.
"Your honour, you're not given the full facts," Mr Macedone told the court.
Dr Chye and his sister Mrs Caleo had been called as witnesses at an overseas ICAC inquiry into a man who committed fraud involving a bank in Malaysia, he said.
This evidence, he said, provided an alternative motive for the deaths.
Police prosecutor Clint Nasr said all the evidence led to the accused.
"Rita Caleo simply knew too much," he told the court.
Mrs Caleo's murder came just two days after a $50,000 reward was offered for information about her brother's unsolved murder.
Her then-husband had also been having an affair with Mrs Caleo's friend, which she discovered in April 1990, court documents show.
Four months later, she was dead.
Police allege Mr Caleo had swung by the family home on the afternoon of her death, to make sure the bedroom balcony door was open for the hitman.
Last year, police arrested Mr Caleo's younger brother Gerard Phillip Caleo, 42, for helping facilitate the murder.
He was granted bail with a surety of $1 million.
Mark Caleo was refused bail on Wednesday to face Central Local Court on February 17.
Police anticipate making further arrests as they try to extradite the alleged killer from overseas.
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