The child I babysit sometimes is 5 years old. Last time I went to take care of him I noticed he has this awesome painting of the moon in his bedroom. He told me his mothers friend painted it. After he told me the artists name he then explained to me “She used to be a boy but she didn’t feel good so now she just takes medicine and it helps her to be a girl. She feels better”
It’s literally that easy to explain it to kids.