This is a great post @boxcarblue and one that I have had with my two oldest girls. I told them that when a person or animal dies that their time here ends and that it is important for us to see goodbye but also to celebrate all the good things they have shared with us. We always spend time talking about then and what memories we have.
I then explain that their body goes back to the earth where it will help to feed everything that we see in nature, so in a way they are still around us everyday as they are part of everything.
I also explain that people can have very different opinions about death and what happens when we die and that that is their right. Their experience of death has been losing one great gran mother, some pets and unfortunately a friend of theirs. They seem content with the answer I have given them, and in the end that is what I believe. I didn't really find it a difficult question to answer.
Thanks for your thoughtful reply. It seems like you feel pretty sure of your beliefs, which I imagine makes it easier to explain. I don’t really have a set conviction, at least I didn’t think that I did. After answering and responding to all of these great comments, though, I see that I do have some core beliefs that have led me through these discussions quite naturally. I like that you have opened the discussion you’ve had with your daughters to the various beliefs that other people might have. I haven’t gone that far, but that is very important too, helping children to respect others beliefs and also to not feel that their own beliefs are threatened by those of others.