Getting the terminology right is like choosing the correct pronouns for someone. We found that answering this question comes up more than you think and until you are comfortable with the answer it brings instant and clattering pain.
Our decision was we still have the same amount of children, just because Dan isn’t here doesn’t delete him. If you feel the need to say I have 3 kids but one has passed on, that’s fine – but don’t suddenly not include them as that’s not fair on you or them. People do though and you can sense the pain when it happens.
if you want to justify it, maybe this will help. I have 8 Great Grandparents, none are alive, but I have them regardless, so it’s the same now with how many children, brothers, sisters or whatever the relationship was, with the person who has gone.