Why would it be more appropriate to put the highest GPA of all students – excluding transfers – and indicate that on the transcripts? What do you think should be on the transcript of the new student?
Adcoms aren’t stupid. They’re going to realize that asterisk exists because there are students who (a) are transfers and (b) have a higher GPA than yours. And when they call your GC for clarification (because nobody writes transcripts that way), your GC is free to tell them the asterisk exists because your family insisted on it.
Colleges aren’t impressed by grade grubbing. Being valedictorian isn’t going to get you into any college, and not being valedictorian isn’t going to keep you out. I don’t know why you’d want valedictorian on your permanent record because it’s not going to impress anyone.