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Good evening/early morning. I would like to help you today.
I think that you did a wonderful job addressing the situation. The wording that you used to explain to the children how it is inappropriate to kiss, (both for their age and the fact that they are relatives) was perfect, I couldn't have said it better myself. In terms of discussing it further, no I do not think that it will be necessary, unless another similar situation occurs. I do think that you should speak to your nieces' father (your brother) about what took place, and how you handled it, so that he can keep an eye out for his daughter, and correct any related behavior she may be showing elsewhere. I also think that the next time the children come together, you let them know that no more pillow fighting or wrestling will be allowed. Give them some other options of things to do; board games, sports, bike riding, roller skating; something that involves less physical contact. I think that your son and your niece are old enough to understand why the change has occurred.
I think that the first step is to help the situation so that it can't occur. Don't allow the two to be away from supervision (doors closed or such). Also set the proper sleeping arrangements, I suggest them in separate rooms. If it does occur again, you should contact your brother, and let him know what occurred. I would recommend having him pick her up, and letting the two of them know that your niece will not be able to sleep over again for some time, until you feel that you can trust her not to try kissing your son.
Also, know that this is not uncommon. Children are experimental at this age; and cousins are generally not as close as brother and sister, kind of like friends in their own minds, so they would feel comfortable experimenting with a cousin.