[mscat]

I also agree that this is heartbreaking thing to see . I have a few guess that might explain max's sudden behavior change .
Maybe , a child could have suddenly dropped something ,or moved too fast, made a very big noise that scared Max?
Or it could have been any child , a friend, neighbor's child may have scared Max , traumatizing him. Without the kids even knowing it, or doing it on purpose.
When a animal or human is frightend their are always 2 responses . It is either Flight, Or Fight. Fear, or aggression. For example I have 2 canines. And learned quickly how very different they are. One responds in fear, she will run away when scared, however, the other will aggress. She is only 4 months old, and I picked up on her behavior right away! My puppy is unlike my Yorkie, however , it does not matter what breed of animal , it is the same response.
Something occured in Max , to have him now respond in this manner . Even if it is unknown something did happen.
With propper behavior intervention, Max can overcome his fear agression response. Max is sending out clear signals to your children right now. He is not trusting kids right now.
Try allowing your kids to offer Max healthy , small treats to him. Not out of their hands, but toss treats to Max, to try and start rebuilding the trusting relationship he always had with your children. Max needs to know your children are not going to hurt him, and are his family. In the meantime, I would keep Max behind a gate if you can. Your kids come first , and Max needs to be retrained . He needs to relearn some basic skills , and trust your children again. This can work , espeically with the loving bond that has already been there before .
I would also like to suggest taking Max to the vet, making certain that he does not have anything medical going on with him. Sometimes, a sudden behaviral change can mean that a dog is not feeling well.