I agree, full disclosure is best. Though depending on the experience of the owner, I would be inclined to tell them BEFORE they ask, if they are a newbie. I don't like the idea of doing that to a new owner, especially since most of them take over teams in bad shape already.
The biggest debate is the whether or not he'll sign with the team he's been traded to? Nobody seems to really know. The best I can figure is 'It depends' on the team. Some they will resign and others... Nope still going to FA..