[Juliana13]

Your daughter knows who her mother is. It's you. Of course you should be telling her now that she was adopted, and that she grew in another woman's tummy. As her parent, you can decide when to tell her who her Birthmother is. I told my children early, and showed them pictures. By 2 1/2 my older one got it. And knew who her birthmother was. And who her brother's birthmother is. (Having a new sibling come along helps that process, I think). Given that it is your sister-in-law, everyone else in the family probably knows, or will know, and therefore, it should be open information to your daughters early on, so they don't feel it is a secret held from them. Tell your older daughter who her sister's birthmother is, if she is old enough to understand. But also tell her in no uncertain terms that YOU are her mom, and will be forever. Kids can come up with all kids of ideas that make sense to them... and since there is interaction, she may question the way it works, and the permanence of it. But kids are also capable of handling things way better than we often assume, too. Especially if WE can handle it well.

As for the gift thing... Yes, it was not especially thoughtful of your sister-in-law to buy a gift for one child and not the other. Although I see where she is coming from, - your other daughter is not her birthchild. I would not ban her from the gift thing. I would tell her why you are not comfortable with it, like you did, but instead of not accepting the gift, I would thank her for it and let your daughter wear it. Who needs to know where it came from? The problem comes later when both daughters are older, and one gets gifts from the aunt that the other doesn't. If the birthmother was not related to both girls, it would be easier to explain to your older daughter. But since she is your other daughter's aunt, yes, she SHOULD get gifts - even a token gift - for you older daughter. That is just common courtesy. But you are not in control of your sister-in-law's courtesy. You are only a steward of your own family. You can tell her that in the future, if she doesn't have gifts for both children, then to give them to you privately, so the older daughter won't feel left out.

That just stands to reason. If anyone, regardless of relationship, came to give a gift to one of my children and not the other, I would ask them to do it privately, not in front of other children.