My SIL had to go to a wake for her former boss this weekend. He died of a rare form of cancer, and she was close with his daughter as well. Despite the fact that I was staying at her house and offered, and my brother was also home, she took her two girls (2 and 1) to the wake with her. I was surprised for a couple of reasons.
1. My 2 year old niece is very bright and "with it." So I asked SIL what she planned on telling her if it was in fact an open casket. She told me she didn't think it would be because I guess he looked pretty bad toward the end. She was right, and he was cremated with an urn at the front of the viewing room.
2. Is a wake an appropriate place for children of that age? I'm not judging (and I'm really not, because we all know I say flat out when I am lol). SIL told me that people would "want to see the girls." Really? At a wake for someone else not even related to you, people would want to see your children? I mean they're very cute, but I can't say that seeing someone's two kids would make my father's wake any easier. Plus, SIL told me that my 2 yo niece popped a squat on the praying kneeler in front of the urn and used it as a chair. Knowing my SIL, I'm sure it wasn't allowed to continue for more than few seconds, but still....I'm sort of befuddled.
So what say ye, ladies? Yay or nay for small toddlers at a wake? I was 8 when I attended my first one, and it was my great grandmother's, so it was family. And the one wake I did go to just this past summer, I paid the babysitter to watch DS because from my view, babies are sort of unpredictable and attention grabbers, whether you want them to be or not. So a wake is not the place for them. Again, I don't think it was "bad" per se that they were there. But I can't say I'd make the same choice, either.

Re: WWYD?
If it was someone that the kids were close to, I would probably take them.
Children
Children should be encouraged to attend the ceremonies surrounding the death of a family member or close friend to whatever degree they feel comfortable. Children learn through these experiences that death is a natural part of life and that rites are observed when someone dies.
Always consider a child's age before taking her to a funeral, memorial service, or a prolonged visitation. Because young children can become restless or have trouble staying quiet, you may choose to have them stay at home with a sitter, or bring a sitter who can take them home if needed.
Older children should sit with their family, closest to whomever can give them the most comfort. The children should wear clothing that's age appropriate and similar in style to that worn by adult family members. Generally, children do not wear black."
Is it possible she brought the kids to comfort her boss's daughter? You said that they were close. It was really hard for my cousin and his wife to see babies, and no one brought them to the funeral, but within days after, Sue was asking after all her friends's children. Brian had a harder time with kids for a while.
I want to be able to grieve the loss of my grandma with out the distraction of my 13 month old and I think others at the service would want the same.
BUT my mom passed when I was 12. My little sister was 8 and if I remember correctly there were a few of her friends who came with their parents to the church service.
I think it depends on each situation. I was 5 at my first funeral. My grandfather passed away. I remember nothing about it. I was thirteen at the next one, and a very dear friend's grandmother passed away. Her grandparents had just taken her and I to the OK State Fair days before and we had one of the best weekends of my life.
The first funeral my younger siblings went to was out little brother's. I was 15, brother 14, sister A was 10, sister K was 6. It was extremely traumatic to them. I don't think any of us know how we would react until the situation presents itself.
I'm sorry for your sister's loss.
DS1: Quinn - 10.22.10 and DS2: Cole - 01.18.13
BFP1: DD1 born April 2011 at 34w1d via unplanned c/s due to HELLP, DVT 1 week PP
BFP3: DD2 born Feb 2013 at 38w4d via unplanned RCS due to uterine dehiscence