Do you have a Child Life staff on your unit? Child life specialists are trained in communicating with children and doing medical teaching- including teaching about death. I highly suggest utilizing their expertise in these situations.
Like adults, children will have different ways of processing their grief. Of course, children of different ages/development levels will have different understandings of death and grieve differently, but even children of the same age/development will behave differently. It's important to follow the child's lead, and the parent's wishes in these situations. Sometimes the child will want to see the sibling after they have passed. In most cases, it's a good idea to let them. Many times parents or even staff feel that this will be traumatizing for the sibling and they try to shelter the sibling from the death. However, allowing the sibling to see the child that has passed can help provide closure and a more concrete understanding of the situation.
We had a little girl pass away on our unit who was about 5 or 6. She had a twin sister. After she passed away, the twin wanted to see her sister to say goodbye. She calmly walked into the room, climbed into bed with her twin and told her that she loved her, and that she would miss her. Being able to see her sister and say goodbye was actually very therapeutic for her.
Most of the time (just like with adults) the best thing you can do is listen to the child if they need to talk. Depending on their age/development, they may or may not want to talk about the death. Sometimes, especially older children will have very mixed emotions. They may be upset about the death, worried about their parents, worried about how their life will change now, and in some cases they can even feel relief. This is especially true if the sibling that passed away had a chronic illness that required a lot of the parent's time and attention. You can tell the sibling that it's okay to have lots of different feelings and to not know what to say or do. However they are feeling, it does not make them a bad brother or sister.
Often one of the major tasks you might have related to the death is helping the parents explain to the sibling. This can be very difficult, so I can't stress enough the importance of Child Life. If the parents have specific religious beliefs (i.e., the sibling is in Heaven), make sure you are aware of that so you can include that in your explanation to the child. Use simple language that they can understand. If they do want to see their sibling (and the parents agree) explain how the child will look and feel.
Finally, I want to stress that children, even young children, understand more than we give them credit for. It's rarely a good idea to try to hide illness and death from a child, even with the intention of protecting them. Children are intuitive. They know when something is wrong and, in most cases, it's better to explain the situation simply and honestly. Otherwise, the child will come up with their own explanation- and usually end up thinking that they did something wrong or somehow caused the problem.
I can best illustrate this intuitive knowledge through another example of twins. At about 20 months old, both boys (identical twins) had been very sick with the same chronic and fatal illness for over six months. One (A) was slightly healthier than the other (B) and able to be off of the monitoring equipment, go for walks, etc. B was more sick and really couldn't leave the hospital room that they shared. Both boys were very close to their father, who stayed with them 24/7, holding them, playing games, taking A for walks around the unit, etc. Like most siblings, they were jealous of each other and if daddy was spending time with B, A would often cry and fuss until he got the attention back. If daddy were in the room, A would refuse to allow any of the staff to hold him or remove him from the room.
Eventually, B got much sicker and it became obvious to us that he would not be with us much longer. In those final days, A's personality changed completely. He would sit quietly in his crib or stroller and let his daddy hold his brother. He never cried or demanded attention from his father those last days. He simply stayed quiet and watched. Shortly before B passed away, his parents wanted to be alone with him. A allowed the nurses to take him from the room without a peep. He hardly made a sound and never fussed to go back to his father until after his brother had passed away and the parents asked for him to come back in.
You can never tell me that A didn't know that his brother was very, very sick, and that B needed his daddy's attention. Nothing else can explain the sudden change in A's behavior.
I hope I helped answer some of your questions. Again, if you have Child Life available, please utilize them and, in your free time on the unit, sit down and ask them for some practical advice for these situations. As you care for children at the end of life, and in their death, you will become more experience with how to be with a grieving family. Helping families through their grief is a learned skill- and one that you will become more familiar with throughout your time in PICU.