Kids don't know what modesty is until we teach them. I believe a better word for "modest" is "shame" A lot of parents stop letting their children see them naked when they start getting curious and asking questions or staring. But we have to remember that they are not staring to be pervy, they don't know what that is either until we teach them. This is actually the best time to LET them see you naked.
Think about it like this. They see you naked, they don't know about sex, or shame, or taboo or any of that stuff, so what's the worst that can happen from this? Well I can tell you the best....
The best thing that could happen is that they start asking questions and you will get to become the best thing your child could ever hope for, an adult who can teach them about the birds and the bees. You can answer all of their questions and then they won't have to get all the wrong information from their friends or someone else outside the home.
Remember the only reason we think nudity is so bad is because we were made to think it ourselves. Don't put that stigma on your children. Teach them when it's appropriate and when it's not, but they shouldn't be afraid to see or be naked in their own home. That's teaching them to be ashamed of their body.
My daughter is now grown and engaged to be married. She is 24 years old and has been with her boyfriend for 5 years now. Now I can't be sure, but because of treating the nakedness like this, it created a by-product of trust. We don't have secrets in this house. If there is then they are kept quite well... But my point is from what she says and from what we gathered anyway, she is still a virgin saving herself for marriage. You can't ask for anything better. It's like a story book.
I don't advocate walking around naked all the time, but just be comfortable getting dressed or showering, basically times when nudity is more or less a must, those are the times that are appropriate and their shouldn't be any shame. I can probably make a list of all the pros and cons (if any cons) of why it really shouldn't be the issue people make it out to be.
I am only speaking from experience. Some people feel very strongly about nudity. I just feel that their fears are misplaced and they are not thinking logically. But again this is just my opinion, but I do speak from exp.
Please just think about it.