in my experience children handle it better than adults and matter of fact is best. Since we lost our 3rd son (stillborn) my children are very comfortable talking about death, but it really throws some adults. We also don't try to cover up or distract from sadness. If they see me looking sad or teary and ask why i tell them i'm just missing your brother and they give me a hug and move on. If they are sad about a death we tell them it's ok, it's normal to be sad when someone dies. Dh's brother died just before our eldest was born and we've always discussed him openly too.