I told my daughter that santa was real. Part of the magic is that when they come to disbelive its about the first time that they are thinking properly for themselves. The approach of critical thinking. As an athiest I found it much harder to deal with my daughter's questions about the existence/ nonexistence of god as at primary school it is taught as fact. She had to come to terms with the fact that her parents thought differently to how she was taught. I was rather delighted when at the age of 6 she decided that Adam and Eve must have been the first people to evolve.

Let the kids believe in the santa, tooth fairy etc and enjoy the fun but welcome the fact when they start thinking for themselves.

All the best

Julie