My understanding of the issues with lead paint is that you want to avoid eating any (your kids are old enough to keep it out of their mouths) and you want to avoid breathing the dust from sanding it. That one is up to you.
So, painting over it should not be a problem.

It would be hard to believe that children in the 8-12 range would eat the paint, mainly it is infants doing such things. Painting over it should not be a problem but understand that if the lead layer peals off comes your new layer also and if anyone ate those chips it would have the same consequential results. And I don't have much faith in "encapsulation."

Painting over lead paint is just a band aid since you always have to continue to check the integrity of the coatig. However, if the walls are in good condition and you do not have to do a lot of surface prep I would suggest a good lead encapsulant product from either Fiberlock or Dumond chemicals. The friction areas like door jams and window frames should be stripped of the lead paint. Visit the web site at www.dumondchemicals.com and there is a write up on lead paint removal. It can safely be done if you use a system that is always keeping the paint in a wet or damp state so there is no airborne lead dust.