Well you could always do what my mom did...Just never tell the kids the truth about what any of our relatives are really like until they are old enough to figure it out all by themselves and then it hits them like a ton of bricks

... kids wont perceive the flaws in these people unless you make them obvious.
Seriously though, I turned out okay...in the past 4 years through talking to cousins, doing some digging and listening in on conversations I found out:
My aunt it is a lesbian (not that I find it wrong but I'll be damned if my mom would ever let grandma find out)
My cousin lost it on a drug bing
My other cousin lost it on a drinking bing
Yet a third is still on methadone
My grandfather was an alchy until the 80s...
and that's just my moms side, and doesn't include personality flaws....and my fathers side is twice the size so you do the math.
I was oblivious to all this until my late teens simply because my mother and her mother are the masters of the family truth cover-up...I'm sure my family has a rich history of prostitution and moonshinin burried away somewhere.
and in all seriousness, they are going to figure it out eventually and the sooner they figure out the truth of life the easier it will be for them to grasp the consequences of actions in the real world...people shelter their kids too much IMO, the coolest kids where always the ones who knew more truth about life.