Co-writers, or something else?

Who will get the by-line? If it's both of you, then go with that in the letter. No need to detail how you manage the collaboration though.

There are other husband and wife book teams out there. I can think of three in children's. Might be good for you to see if there is info on how they did this. Of course, they are all more well known - Andrea Davis Pinkney and a husband whose name I should know off the top of my head, Kate and Jim McMullan ( Author and illustrator of I Stink. The last name looks wrong to me here.), Leo and Dianne Dillon.

Hey there, Kate!

DH and I have a similar arrangement. The setting, plot lines, and most of the characters are his; however, I have several characters that are movers and shakers, and I've filled in a lot of the small worldbuilding details. Since I'm the one that actually enjoys word craft, it falls to me to get everything out of his head and onto paper. We very much have the "mechanic/artist" interaction going on, so the distribution of labor is such that "co-author" doesn't quite describe what we're doing. He has an initial in the pen name, but it's because I want to give him credit for his significant input. He doesn't actually care.

I'm sure it's something that would come up naturally in conversation either after or just before the deal is made, when the agent wants to get a feel for future plot development and other book ideas. I don't think you need to mention this is in the query.

As someone who doesn't actually do divorce work any more, because it'll eat a lawyer alive, but did them once upon a time, please, please, please: draw up a partnership agreement now and establish who gets what and who does what, in the event of a falling-out, so you have the rules of the game worked out BEFORE there's a problem.

I've been tangentially involved in divorce work (I do some drafting and research for another lawyer who specializes in divorce mediation) for more than two decades, having seen quite literally hundreds and hundreds of divorce agreements in that time. In all that time, I have seen exactly ONE divorce that involved copyrights and royalties, and it was a relatively simple situation, where the husband and wife were getting royalties for a one-time acting gig, something they spent maybe a week on, and that they weren't ever going to do again, so it was more like getting dividends than owning a bit of intellectual property. It wasn't at all the same as the blood, sweat and tears that goes into writing a book, with the expectation of doing that all over again.

What I'm getting at in my rambling way is that the courts really don't see copyright/royalty issues very often, and the judges don't know much about publishing and copyrights, etc., so if you don't have a written agreement, and there's a falling-out, the divorce court isn't really going to know how to handle the issues. They're used to things they can divide up easily, like bank accounts and real estate and pensions, but they wouldn't know where to start with copyright, or all the various quirks of the publishing industry. The judge would do the best she could, but there's no "usual way" of dividing up this kind of asset, no starting point that she would be familiar with. OTOH, if you have an agreement, the judge would likely be thrilled, and would simply adopt the terms of that agreement, or interpret them if necessary, rather than having to start from scratch.

I would recommend consulting an attorney ASAP, but even before you do that, you should sit down and figure out who gets to make decisions (like whether to accept a contract, or to choose an agent or to decide to self-pub vs. trade pub), and who gets the money, and what happens if you separate -- do you continue to write together, who gets the pen name (if there is one), who gets the money from past books and who gets t he money from books AFTER the separation. The more issues you can bring to the attorney's attention, and that you've resolved ahead of time, the better the attorney can draft an agreement that covers those issues.

I know, it's not very romantic to discuss separating, but you know what's even worse? Fighting over these things when the sight of the other person nauseates you. You're much more likely to reach an agreement that you both find reasonable at a time when you actually like each other, than when you hate each other's guts. And whatever you work out together is likely to be better -- for both of you -- than whatever the judge imposes on you, if you can't agree.

Not giving individual legal advice here, other than that you should seek the advice of a qualified professional in your jurisdiction, and do some preventive work NOW, instead of waiting until later.

GinJones beat me to it...

All the best intentions won't amount to a hill of beans if the marriage or partnership goes south. Someone is always hurt and wanting what they feel is their just rewards, even if they claim otherwise now...