I'm not a CAG parent, so my advice is crap, but sometimes a little crap is better than no crap at all.
When I'm at this point with my kid(s), I will likely mention death only briefly, and then just answer questions. How the conversation goes down will depend on the questions asked. But there are two traits I'm positive this conversation will have:
No "sometimes" -- I hear this often in explanations to kids. "Sometimes, when people..." etc. No. No sometimes.
No beliefs -- only facts. I'm going to try hard not to let my opinion or the opinions of anyone else influence my kid's spiritual development. Spirituality is personal and should be the result of personal reflection. No matter how you frame your opinion, if your kid idolizes you, as most kids idolize their parents, stating your opinion will influence your kid's disposition. I'd let my kid know both sides of the "where's he now" story if asked: he is not inside his body anymore, some people think he went somewhere that we can't reach, while other people believe he isn't anywhere, but nobody knows who is right or wrong. I think it's very important that they understand nobody knows this answer, so that they don't later hear believers and/or non-believers stating their belief / non-belief as fact and become overly influenced by the authoritative presentation of it all.
My parents did a great job of that second point, and I really value that they did. Although I was sent to a Catholic school, my family let me know from a very young age that there are many things that nobody knows. This really helped me hear all viewpoints skeptically, both pro and anti faith arguments, and that skepticism really helped me define my worldview. So, yes, to each their own, but personally I'd steer clear of any "he's in heaven" type statements of fact.