For someone that does not want to discuss such matters you are quite vocal about your opinion on the matter. I strongly disagree with such a black / white approach you take on the matter.
My line of work (CPS) leaves my view of the world colored, certainly. This is a burden anyone in my shoes will have on their shoulders. When working a case, I need to be aware of all facets, give parents a chance, then another, and then one more, and one more, unless/until there is proof that doing so is harmful to the child. Because our main goal (in Norway, anyway) is to ensure that a family can still exist, and overcome the problems that got us involved together. In this, I am nowhere near black/white, because that would not only disqualify me from doing my job fully, it would also potentially harm a child. And that, I cannot abide.
What I DO NOT have any tolerance for, is the parents that let their children fall apart under their watch, and then act like they had no say in the matter, and take no blame. To quote Dennis Miller: "If your child is willing to kill himself due to something Gene Simmons says... you're simply not doing your job as a parent."
I know I came off as harsh and unreasonable, and that most parents really are good people that deserve all the praise in the world, and that a million hypothetical situations/environments/influences can affect how a child turns out in the end (more-so in a game where you can undo morality with a magical spell), and every child has different levels of resilience, determined by an equal amount of factors. But a parent should never underestimate it's importance in the life of its child. This I say as an experienced professional.
Returning to the topic: A paladin is required to be honest, doubly so if he serves Sarenrae, the goddess of honesty. The paladin can hold his tongue, and omit some points if there were compulsions involved, or he doesn't know the full extent. Up to the paladin. Either way, the cleric can cast Atonement afterwards, so worst case scenario, you are set back some gold.