By Jason Watson (Google+)
This KB article has been superseded. Please see our updated KB article on forming an LLC or S Corp with your spouse.
No. Don’t you see enough of each other at the house? All kidding aside, this is not the best idea- as a multi-member LLC you will be required to file a corporate tax return on Form 1065. If you are starting a new business our suggestion is to form the LLC as a single-member. If you expect to be profitable, then elect to be treated as an S-Corp for taxation purposes. If you expect to lose the first two or three years, the S-Corp election becomes a bit more complicated and more discussion is required- it is generally better to delay the S-Corp election so you can avoid performing payroll and filing a corporate tax return.
And if you are concerned about ownership transfer in case of death, we suggest taking care of this issue within your will and estate planning. Transfer of assets between spouses during death is generally seamless in most states. Contact a wills, trusts and estates attorney for more comprehensive analysis and advice.