Q: How do I tell my 2-and-a-half-year-old that her dog died?
A: Talking about death is tricky with little ones. We tend to want to use euphemisms to lessen the blow, but don't be tempted. Euphemisms are confusing for kids and can end up being scarier than the actual truth.
For example, some people refer to death as "going to sleep" for a long time and not waking up. This can lead to a fear of going to sleep, which will result in issues at bedtime that may last a long time. Your daughter might be afraid to let anyone go to sleep, lest they never wake up.
One euphemism that adults often use to refer to dying is "passing away." Sometimes we forget that children don't know what this means. I know a woman who approached the little flower girl at a wedding and said "I'm a friend of your grandma's." The preschooler responded "oh, are you the one that passed away?"
A natural connection for us grownups is the one between illness and death. But resist the temptation to say "Lucky died because she was very sick." Your daughter will be terrified of illness. Every time she, you, or anyone she knows or loves gets a little cold or a sniffle, she'll wonder if they're going to die.
Another thing you don't want to say is "she's gone to be with G-d" or "she went to a better place." My friend's daughter has taken to saying "I don't care if I die, Mummy, because I'll go to heaven and it's better there anyway!"
I have found that the best way to explain death to little kids is to say that the person (or animal) got very very old and his/her body stopped working. Just like sometimes an old toy stops working because it's old and we've had it for a very very long time and we can't fix it anymore. Lucky's body died, but her soul (the part of her that we loved, that was playful and silly and was inside her, in her heart) is - fill in the blank - with G-d, looking down on us from heaven, etc. Or you can just leave it at that.
Be prepared for a lot of questions. Especially "When will Lucky come back?" My grandmother died when my daughter was three-and-a-half. She's five now, and every once in awhile she still asks me when Great Grandma is coming back! The finiteness of death is very difficult for children to grasp. You're going to have to gently remind her every time she asks that Lucky won't come back. She loves us very much but she can't come back because she died and her body doesn't work anymore. But we can think about her and talk about her and look at pictures of her to remember her, and it's OK to be sad and miss her - Mommy misses her too.
Your daughter is too young to make this connection, but one day, like my daughter did recently, she might ask "Are you going to die, Mommy?" Here's where I recommend against honesty. We know that nothing is certain in this world, but for a young child, the knowledge that Mommy and Daddy are going to be there tomorrow is everything. So as hesitant as you may feel, try to sound confident when you say "Everybody dies, and one day Mommy will die too. But not for a long long time, when I'm very very old and you're very very old too. You don't need to worry about that."
Make sure she's asked you all her questions and gotten satisfactory answers. Then change the subject and bring out the toys.