My suggestion is dont tell BM, the kids will tell her next time they see her. That will save you some drama!
Now about the kids,
Have you asked them what do they think about having a baby sister/brother in the house? Usually when kids are that young they njoy the idea of having a baby in the house. So most probably if you present it correctly like " your father and I love each other very much and we would like to give you a baby sis/bro... have a bigger family where we will all care and love each other" kind of thing, i think they will get excited and anticipate it.

I dont have any kids with DH yet, but when we told his 5yo daughter that we are getting married, we made sure to tell her that we want to give her a baby sis/bro. She loved it and asks about it quite often.

Good luck and tell us how it went!

I did'nt tell BM }:) its none of her bussiness!!! and the way we told my SD was simply the truth "u are going to be a big sis" she was 5 when my son was born so their was excitement but nothing big, now that she is 10 and my boy 5 and girl 3 she is a very good big sister... dont worry just be honest (duh lol) they will be fine.. congrats

With SD11 (she was 6 at the time...) we made it a family occasion. She adored my BD24, and loved to watch Dora the Explorer back then. A new dvd called "Big Sister Dora" had just come out and was about Dora's parents having a baby. We bought the DVD, made popcorn, and we all sat down for movie night. (DH, me, BS22, BD24 and SD) We watched the movie and when it was over we told her that she was going to have a little brother in a few months and that she was going to get to be a super big sister like Dora and BD24. We also made sure to let her know that she would always be her Daddy's girl etc... and that we were here to answer any questions she might have. We went to the mall a couple days later, and she asked if she could buy something for her little brother, so it worked pretty well. We made sure that DH talked to her about every week during their phone calls (SD lives out of state) and always asked if she had any questions.

As for BM, we didn't tell her. We waited until I was almost 6 months to tell SD and were absolutely positive that if we told BM first that she would go into full 'poison SD against the baby' mode. BM always made it sound like SD and she were attached at the hip and shared everything so we were sure that SD would have told her - she didn't. We called SD when BS4 was born and when BM answered the phone she gave DH a venom filled "congratulations". Whatever.... it worked out for us. She sent an email later in the week going on and on about how SD didn't know anything about the baby and how could we keep it from her (SD) and not give her time to adjust to the idea of a sibling. DH replied with 'she's known about him for 4 months now and we have talked about it every week since then. I wrongly assumed that she would share this with you, but rest assured that she knew and has been excited about it'. Again, whatever.... she wasn't our concern, SD was.

As for making them feel included, let them have some input on a few items for baby, like let them each pick out a pair of pj's or an outfit, or a stuffed animal. We made sure to send SD a picture of BS wearing the bib and pj's she picked for him and it helped her feel included. Congrats!

In my situation, SD5 had been asking for months when we would have a baby. I am 13 weeks pregnant now, and we finally told them about 4 weeks ago. We planned it for a night when we had them overnight -- and we also planned it so that my fiance would call BM and tell her the news that night prior to telling the kids. We had a few reasons for doing that: 1) We didn't want to tell BM before the kids knew, because we didn't want her negative reaction to the news to be the first thing the kids heard about the pregnancy; 2) We felt that if she heard the news from the kids she would be very upset that it was how she found out, and we just decided to be mature about it and tell her the same night the kids were finding out.

The kids (they are 5 and 2.5) were excited. We sat them down and asked them how they felt about being a big brother and a big sister (again). Then we told them we were pregnant! The 2.5 year old doesn't "get it" still and keeps trying to lift up my shirt to see the baby!! :)SD5 totally understands and is really pumped...and hoping we have a little girl.

BM had a few snotty remarks but DF put her in her place and told her that he had made the choice to be mature about how to tell her because we didn't want any negativity. This led into a conversation about how we want to make it a positive thing for the kids and that we'd really appreciate her help there. We were (and still are) very worried that BM would say things to SS2.5 like, "ohhh, poor baby, you aren't going to be Daddy's baby anymore! But you'll always be MY baby..." or something like that. We are most worried about stepson's jealousy and stuff htat you really can't control but can definitely help if everyone is very positive! We've really been pushing the whole "big brothers are cool" thing to SS, and ask him all the time what kind of things he thinks he can teach his little brother or sister. So, all in all, things went pretty well for us!

However every time I see BM now she GAWKS at me...it's like she's inspecting my belly and comparing my pregnancy to hers...it's nauseating.