ILR and UK Born Childern

My husband applied for ILR and included me as dependent on 28th February 2013 at croydon using premium service.The case worker asked for additional documents and deferred the decision.We submitted the documents on 11th of March 2013.Our visa expired on 23rd March 2013. We did not include our two uk born children in our application.We have not received any response yet from home office about me and my husband ILR application.
Our uk born children also had limited leave to remain in uk till 23rd March 2013, which has now been expired.

1-- My question is that what is their legal status as we haven t included in our application for ilr and their visa has expired.?

2--- Secondly in case our visa of ILR is refused what affect will have on our children and the case is decided in no then they have no right of appeal then in that situation what we should do??

1. Overstayers.
2. Wait for outcome of your appeal.