When I decided to terminate a family, I sent the mother an email, then typed out a letter to give to her at pickup. I basically stated that "due to .........., I am no longer willing to provide care for your family. As per my contract, I will continue to accept DCK until you find alternate care arrangements, not exceeding a two week period. I hope that we can all move forward through this in a mature and mutually respectful way, and I wish you all the best in your future."

In my personal situation, I made it out so that it sounded like I felt like I was not able to meet the mother's perceived needs. This way, I think it softens the blow a bit, but that is up to you.