Pandemics such as the Covid-19 pandemic have shown to impact our physical and mental well-being, with particular challenges for children and families. We describe data from 43 adults (31♀, ages = 22-51; 21 mothers) and 26 children (10♀, ages = 7-17 years) including pre-pandemic brain function and seven assessment points during the first months of the pandemic. We investigated (1) changes in child and adult well-being, (2) mother-child associations of mental well-being, and (3) associations between pre-pandemic brain activation during mentalizing and later fears or burden. In adults the prevalence of clinically significant anxiety-levels was 34.88% and subthreshold depression 32.56%. Caregiver burden in parents was moderately elevated. Overall, scores of depression, anxiety, and caregiver burden decreased across the 11 weeks after Covid-19-onset. Children's behavioral and emotional problems during Covid-19 did not significantly differ from pre-pandemic levels and decreased during restrictions. Mothers' subjective burden of care was associated with children's emotional and behavioral problems, while depression levels in mothers were related to children's mood. Furthermore, meeting friends was a significant predictor of children's mood during early restrictions. Pre-pandemic neural correlates of mentalizing in prefrontal regions preceded later development of fear of illnesses and viruses in all participants, while temporoparietal activation preceded higher subjective burden in mothers.