Although physical death has entered the world, God indicates that for a time our children are sinless, and thus not spiritually dead. In fact, check out this chunk of Isa 7: "at the time He knows enough to refuse evil and choose good. For before the boy will know enough to refuse evil and choose good..." Although just a snippet, God shows that when we are young, we don't know the difference between the two.
This is, in fact, the definition of the prelapsarian (before the fall of man) state. Adam was told, "but from the tree OF THE KNOWLEDGE OF GOOD AND EVIL you shall not eat, for in the day that you eat from it you will surely die." (Gen 2:17) Pay close attention to that. It was the KNOWLEDGE OF GOOD AND EVIL l that allowed him to sin. Children DON'T have that knowledge, as God confirms:
"Moreover, your little ones who you said would become a prey, and your sons, who this day have no knowledge of good or evil, shall enter there, and I will give it to them and they shall possess it." (Deut 1:34-39) All the Israelites that did know weren't allowed access to the promised land, but their children, being without sin at the time, were..