אורח חיים ע״גOrach Chayim 73

Se’if 1א׳

שְׁנַיִם שֶׁהָיוּ יְשֵׁנִים בְּטַלִּית אֶחָד, וּבְשַׂר שְׁנֵיהֶם נוֹגְעִים זֶה בָּזֶה, לֹא יִקְרְאוּ קְרִיאַת שְׁמַע, אֶלָּא אִם כֵּן הָיְתָה טַלִּית מַפְסֶקֶת בֵּינֵיהֶם מִמָּתְנֵיהֶם וּלְמַטָּה.

The One Who Sleeps Next To One's Spouse and One's Children and How to Conduct Oneself, Containing 4 S'ifim Two that were sleeping under one cloth, and the skin of the two of them is touching each other's - they may not recite the Sh'ma unless the cloth was separating between them from the waist downwards.

Se’if 2ב׳

אִם הָיָה יָשֵׁן עִם אִשְׁתּוֹ, קוֹרֵא בַּחֲזָרַת פָּנִים לְצַד אַחֵר, וַאֲפִלּוּ בְּלֹא הַפְסָקַת טַלִּית, מִשּׁוּם דַּחֲשִׁיבָה כְּגוּפוֹ. וְיֵשׁ מִי שֶׁאוֹסֵר, וְנָכוֹן לָחוּשׁ לִדְבָרָיו.

If one was sleeping with his spouse, he may recite by turning away his face to the other side. And [this is so] even without the separation of a cloth because [one's spouse's body] is considered like one's [own] body. And there is [an authority] who forbids this, and it is correct to heed his words.

Se’if 3ג׳

אִם הָיָה יָשֵׁן עִם בָּנָיו בְּעוֹדָם קְטַנִּים, מֻתָּר לִקְרוֹת בַּחֲזָרַת פָּנִים בְּלֹא הַפְסָקַת טַלִּית. וְאִם הֵם גְּדוֹלִים, צָרִיךְ לְהַפְסָקַת טַלִּית.

If one was sleeping next to one's children while they are still minors, it is permitted to recite through turning one's face without the separation of a cloth. And if they are older, one needs the separation of a cloth.