You have gotten some great replies. We have a 4 y.o. that is part of a sib group of 5 that we adopted. We have always talked openly about their adoption and their birth mother.
So, when we found out birth mom had another baby now and they let her keep it (
, she has lost 8 children invol. tprs), I waited for the right time to tell them about new baby sis. I had to explain to them that they were giving birth mom "another" chance at parenting (she just had gotten out of prison for the neglect and abuse to my kids 7 months prior to the birth).
Now, the 4 y.o. may not totally understand about baby sis. But, since the older kids bring up the subject from time to time, it is best to be honest. Their main concern is they want baby sis to come live here! Time will tell.