I tell my kids that there's a Santa Claus, that the tooth fairy is small enough to fly under a pillow and that the Easter Bunny sometimes sprinkles carrots in their food when they aren't looking. In other words, I lie.
For the most part, I am honest with my kids to a point that is sometimes much to my own mother's chagrin. My daughter understands that cancer kills people because she's been to the funerals of a few of its victims. She knows that kids disappear because she caught a clip of coverage on Madeline McCann. And, that people can break each other's hearts, because friends have come over to talk about their relationship woes. When she asks questions, I tell her the truth in an age appropriate way and the same goes for my son.
To see why I feel fibs are justified, read more.
The world is such a crazy place, I think it's OK for my children to believe in the handful of things that keep them innocent — a jolly old guy sliding down our chimney, a sprite stealing teeth and a rabbit crazy about carrots. What do you lie about?