Oh, that is sooo sad for you all, especially in the circumstances. Big Hugs.
In regards to explaining death, we have had to explain the departure of 3 great-grandparents to DS within the space of 1 year. Although he was about 18 months old when the first one died, he was 2.5 by the time the last one passed away.
We just said that great-grandad etc etc went to have a very big sleep as he was very tired and sick, and we wont be able to see him any more. But he went to heaven and he can see us and we can still talk to him if we want to.
I think it worked, as one day he was just staring up at the clouds, waved his hand and said blah blah something something I couldnt catch, and then "Bye Nonna".
We also tried not to cry tooo much in front of him, but when he did see us crying he would come over and try to make us better and we just explained that we were sad about great-grandad dying etc.
I am sure there are some books available too which can help expalin the whole death thing, and I think in "The Mighty Toddler" there might also be a section on explaining death to little children.
Good luck with it smile
His Royal Highness, Prince William