K.W.
When our cat was hit by a car, my dau was 3 or 4, but we had a friend who was a child psychologist living next door and here is the advice she gave me:
She said be honest and age appropriate. Don't say the cat is 'sleeping' or anything. In our case, I asked if she should be able to see the cat, as we had it in a box, and since only one side was messed up, and that was the side that was down, she looked pretty normal. Dead, definitely not sleeping, but normal. She said to ask dau if she even wanted to see it. She did.
I also asked if I should try not to cry too much lest my emotion make her feel like she should feel a certain way. She said it was fine to let children know that we are sad when someone we love dies, and that we'll miss them.
So, when she got up and went looking for the cat, I pulled her on my lap, and I told her that Pandora was hit by a car, and that she was dead, and I did shed some tears. I told her she could see the kitty if she wanted, to say goodbye, and that what was going to happen was that we were going to bury the kitty and if she had something special she wanted to put in the box, that was ok. She was very thoughtful: not really understanding death at that age I can't imagine what was going through her head. I told her if she had any questions to ask and I'd be glad to answer (which is how I dealt with the question of how much to tell her: not too much that would overwhelm or confuse, but not so little that she just made up in her head what she thought were the answers). I told her it was ok to cry or feel sad, that I was sad and that I was very glad Pandora had been our pet.
After a few moments of silence, she decided she did want to see her. She took catnip and a toy and put them in the box. She touched Pandora's fur. She didn't cry at all. After about a minute she said 'bye Pandora' and off she went to play.
Now, years later, she did cry. She asked for an angel-kitty pin she saw in the store that she wore for awhile too. She loved that kitty. But she dealt wit it in her own way, at her own speed. The cat she got after that has been with us for 11 years, and now that my dau is a teen, the loss of this pet will be far more dramatic, I'm sure. But as a child, she really was quite stoic.
Good luck to you.
K. Wildner
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www.kimwildner.com