We're having outer envelopes only; FI's step-sister has a child & is engaged (not to father of child), her & her fiance don't live together yet - I think it's ok to just send an invite to the sister & indicate all invitees there.
Here's what I have now, which fits how I've been addressing the other invites:
Jane Smith &
Bob Anderson
Mary Smith
123 Smiths Street
Smith, Ohio
12345
It just seems long, and weird to separate the sister from her kid..