"I did have to have a conversation with them about addiction and got a book to read to them because I was just lying to them so much and covering up and telling lies, and it was just getting too confusing," Richards told Matt Lauer Tuesday on the "Today" show.
The actress said while she tried to shield her two daughters-- Sam, 7, and Lola, 6 -- from media coverage over their father's partying ways, they would still "hear things, through other kids."
Sheen, 45, was fired from his hit show "Two and a Half Men" in March after going on an alcohol-, drug- and porn-fueled meltdown that plunged his personal life into the headlines.
"They are so young," Richards, 40, said of her daughters. "I think they did comprehend some of it. And as they get older they'll learn more as needed but I told them enough for them to make sense of some things that were going on."
Richards, who was married to Sheen from 2002 to 2006, said the Charlie Sheen she currently sees portrayed in the media "is not the person that I met and fell in love with. The man I fell in love with is very compassionate, humble and has a very wonderful heart."
"I still care very much for him and want him well. He's a survivor. If anyone can pull themselves together it's Charlie," she said.
Richards is promoting her memoir, "The Real Girl Next Door," to be released Wednesday.
The single mom recently announced she had adopted a third daughter, six-week-old Eloise Joni, and told Lauer her older girls are enjoying their new sister.
"Oh, they're so excited, feel so blessed, and they love feeding her and changing her," she said. "We're very happy."