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Sam Harper (Chris Pine), a struggling corporate trader in New York City, is in trouble after one of his deals violates federal law and the Federal Trade Commission threatens him with an investigation. Sam's boss (Jon Favreau) urges him to bribe federal officials, at Sam's own expense. Returning home, Sam learns from his girlfriend Hannah (Olivia Wilde) that Jerry, his estranged father, has died in L.A. of cancer. Sam tries to avoid attending the funeral, but Hannah insists on making arrangements. After flying home to L.A., he stays with Hannah at Jerry's house and has a tense reunion with his mother Lillian (Michelle Pfeiffer).
Sam meets with his father's lawyer and friend (Philip Baker Hall), who tells him that the will leaves Sam no money. However, the lawyer hands him a shaving kit. Inside is $150,000 in cash and a note stipulating that the money be delivered to "Josh Davis."
Josh (Michael Hall D'Addario) turns out to be a troubled 11-year-old whose single mother, Frankie Davis (Elizabeth Banks), is a recovering alcoholic and bartender. Sam secretly follows Frankie to an Alcoholics Anonymous meeting, where she reveals to the group that she is Jerry's illegitimate daughter. Sam realizes that Frankie is his paternal half-sister, and Josh his nephew. Sam tells Hannah the news, and his intention of keeping the money for himself. This disgusts her, and she returns to New York, leaving Sam with Lillian.
Sam introduces himself to Frankie as a fellow alcoholic visiting from New York, and soon becomes involved in their life, giving encouragement and social advice to Josh, and getting closer to Frankie. He learns that Jerry visited Frankie and her mother on Sundays, and that Frankie has never met her father's "real" wife and son. Growing close to Frankie and Josh, Sam broods over what to do about the phone calls from federal officials warning him of his deepening legal trouble. Frankie tells him that she does not want him around Josh because she fears he will leave the boy and return to New York. Sam decides to leave, but returns to pick up Josh from school. He receives a phone call from Frankie at the airport, telling him Josh has been in a fight.
One night, after watching Sam put Josh to bed, Frankie embraces Sam and tells him to stay. Sam reveals that he is Jerry's son, and Frankie explodes in anger, throwing him out of the apartment. Later Lillian is hospitalized following a heart condition, and in the waiting room, Hannah finds Sam, and they reconcile. Hannah tells Sam that she has enrolled into UCLA's law program to remain close to him after realizing that he now wants to be with his family. Meanwhile, Frankie receives Jerry's money through a lawyer. She uses the money to enroll at school and move into a suburban neighborhood with Josh. She quits her job and cuts contact with Sam.
After she returns from the hospital, Lillian tells Sam that she made Jerry choose their family over Frankie and her mother. She thought she was protecting Sam, but instead Jerry rejected Sam because Sam reminded him of the daughter he abandoned. One day, Josh, who is having difficulty adjusting to life without Sam, tries to find him after finding Lillian's address, and through his step-grandmother relays his home address to Sam.
When Sam visits Frankie, she is angry. He asks for forgiveness and for a chance to be her brother, and Josh's uncle and father figure. He shows her an old film reel Jerry shot of a young Sam at a playground. In the film, a girl joins Sam, and Frankie realizes that Jerry had regularly brought her and Sam to play together and thus loved both his children. At this recognition, Frankie accepts Sam as her brother.