Short answer. Under Article 761, only the excess comes back. The donation is revoked or reduced just insofar as it goes beyond the portion the donor could freely dispose of by will, measured against his whole estate at the time the child is born, appears, or is adopted. The rest of the donation stands.
What the law says
the donation shall be revoked or reduced insofar as it exceeds the portion that may be freely disposed of by will, taking into account the whole estate of the donor at the time of the birth, appearance or adoption of a child
Civil Code, Article 761 — How Much Is Revoked. Read the full provision →
Only the excess is undone
The instinct is to assume the whole gift is cancelled when a child arrives, but Article 761 is more measured. It provides that the donation shall be revoked or reduced insofar as it exceeds the portion that may be freely disposed of by will, taking into account the whole estate of the donor at the time of the birth, appearance or adoption of a child. So the donation is not wiped out in full. It is cut back only to the extent it trespasses on what the law reserves for the new child. Whatever part of the gift fits within the donor's freely disposable portion survives; only the overreach is revoked or reduced.
Why the free portion is the yardstick
The reason for this partial approach is the protection of compulsory heirs. A parent may give away, by will, only a certain portion of his estate; the remainder is the legitime reserved for compulsory heirs. When a child is born, appears, or is adopted after a donation, that child becomes a compulsory heir entitled to a reserved share. The law therefore recalculates: it looks at the donor's whole estate and asks how much he could have freely disposed of. A gift within that free portion does not prejudice the child, so it stands; a gift beyond it must yield to the extent of the excess.
The estate is valued at the child's arrival
Timing of the valuation is built into the rule. The computation takes into account the whole estate of the donor at the time of the birth, appearance or adoption of a child — not at the date the donation was made. This fixes a definite moment for measuring both the estate and the free portion against which the donation is tested. The three triggering events are treated alike: a child born after the donation, a child who appears (for instance, one thought dead who turns out to be alive), or a child adopted. Each can set off the recalculation and the possible revocation or reduction of the earlier gift.
What this means for donor and donee
For a donee, the practical comfort is that the arrival of a child does not automatically strip away the whole gift; the donee keeps everything that falls within the donor's disposable portion. For a donor, it means an earlier generous donation can be partly clawed back to make room for a new child's legitime, so family planning and estate planning are linked. The article does not by itself resolve how the returned property is delivered or valued in a dispute, nor does it address donations that never exceeded the free portion in the first place — those remain untouched, since there is no excess to revoke.