W/Love & Honesty. Talking about situations they may not understand can be very difficult. You may want to assess how much each of them can understand/how much you'd like them to know & sit w/them individually. Allow time for processing & let them ask questions. This is never an easy situation and should be approached based on the level of understanding you feel each child is capable of emotionally & intellectually.
Simple/positive. For the young child short simple words with repitition over time will communicate the basics. Young kids face some additional needs that can be addressed over time: they did not do or say or wish anything that made daddy sick. There will always be someone making sure she has meals to eat & places to play & sleep if daddy is away trying to get better. Let them ask when ready but repeat often.