A seriously ill baby is a very hard concept to grasp even for an adult. We just don't get it and we don't make a quick peace with it. Therefore it is unreasonable to think that children will have a much better adjustment to this sort of distressing news. Rather, they will likely be saddened and upset and may even wonder why this has to happen. They can also become frightened - will the baby suffer? will this happen to other people? will it happen to them? Your job is to help them name these sorts of feelings. You want to acknowledge that it is upsetting and sad and let them know that you also feel that way. Acknowledging and accepting the distress PRECEDES comforting remarks about God's plans, Heaven and so on. Again, think of your own reactions - even though you might have a world view that allows for some hidden good in the suffering of a toddler, you yourself have human emotions that can't be ignored. The technique of "emotional coaching" (explained in full in my book "Raise Your Kids without Raising Your Voice") can be very helpful here. Having said all this, it is unlikely that your 2 year old will really grasp the situation other than to understand that her friend is sick right now. She can be told about Heaven and so forth, but her experience of this will be quite different than that of your older children. Keep in mind that two year olds routinely have their nannies suddenly disappear out of their lives (by quitting or being fired) and they simply must regroup without quite understanding where this significant person went to.
Sarah Chana