Neighbor objects to new tree that I planted.

[Zyngawf]

Unless you plan on ripping the tree out I think the thing to do is nothing. And whatever happens happens and you deal with it then.

[crone]

Talk to a tree specialist. There are several kinds of root barriers that will protect your neighbors water line. Chemical and mechanical. Getting a root barrier while the tree is young should not be expensive.
They should have it put in as they are the ones concerned about some future something that may happen someday.

I'd talk to a couple of tree guys just to see what your options are.