Do a magic show where you and hubby do a Penn and Teller routine and have the kids be the disappearing rabbits or disappearing assistants. The kids don't have to talk, just hold the hat, hide in a box, or stand there and look cute. You can make it wacky and comedic where one of you does all the talking or no one talks...just mimes the routines, so if mistakes happen it'll be funny and add to the fun. To take this idea a step further you could spoof the master magicians out there.. for instance for levitation, you could stand behind the littlest and lift him in the air like he's levitating, while your husband waves his hands magically.
Or make it very interactive where the whole family can participate in the coin behind the ear stuff, trying to find/hide the card from the deck, or under which cup the marble is hiding etc. The little ones can participate by picking the participants from the audience. Magic kits are at most toy stores and places like Target and Walmart. Go online if you're thinking of doing more illusion type stuff.
Be sure to have great music in the backdrop.. any kind could work depending on the costumes or theme you choose...carnival music and everyone wears top hats and capes for a traditional feel, the theme from James Bond and everyone dresses like a secret agent for a mysterious atmosphere, or rap and everyone dresses in converse and hip hop wear for some flare. You could get creative and use a large box as a prop for the big finale with the whole family climbing inside and "disappearing" by sneaking out the back of the box. If a big box is too hard to find, have a curtain or sheet set up, and everyone can go behind it. Be sure to have a family member selected to open the box on the count of 4..to reveal the big disappearance. LOL!