You lived with God

God is literally the Father of our spirits, and we lived with Him as His spirit children in a premortal existence before we were born on this earth.

Your life did not begin at birth, nor will it end at death. You have a spirit body (sometimes called the soul) and a physical body. Heavenly Father created your spirit, and you lived with Him as a spirit before you received your physical body and were born on earth. This period is called pre-earth life or premortal life.

Throughout your pre-earth life, you were taught the principles and commandments that would lead to happiness, with freedom to choose to grow in intelligence and love of the truth, or not. During this pre-earth life, Jesus Christ, then known as Jehovah was chosen as the Savior and you learned that, through Him, you would be able to overcome the effects of any wrong choices.
God’s purpose—His work and His glory—is to bring to pass the immortality (resurrection) and eternal life (life with God) of His children. He desires every one of His children to find peace in this life and a fullness of joy in His presence after this life. Heavenly Father knew that you could only progress to a certain point without the experience of mortality. In order to become more like Him, you would need to receive a physical body.

God our Father is the creator of our spirits, and we are created in His likeness physically when we are born.
Our mortal life also provides us with an opportunity to:

Gain experience from overcoming trials and temptations.
Learn to walk by faith.
Learn to choose between good and evil.
Thus, our Heavenly Father instituted His plan to help us reach our divine potential.