Hello L.,
I used to work at a funeral home (took time off to be an at home mom!) and I have been asked this question many times. What we always told people was to just tell them the truth. Something like ''I have something very sad to tell you. Mommy has died and we won't be able to see her anymore. She went to heaven." Depending on the child, telling them that she is an Angel now may help. Maybe even buy an angel figurine to give the child in memory of Mommy. If the child will view Mommy in a casket, we never recommended telling the child that 'Mommy' is sleeping. This may give them a false perception that Mommy will wake up. It is OK to prepaire the child by telling them that it will look like Mommy is sleeping.
The funeral home that is taking care of arrangements should have some literature on this subject. Ask the funeral director for some Care notes or ask if they have a lending library.
Good luck and I will keep this family in my thoughts and prayers. I lost my mother when I was 2 1/2, and I remember asking where Mommy was. When I grew older, I found comfort in knowing that my Mommy was with Jesus and was watching over me all the time.
My Sympathies,
K.