The family tree with often show the parents, the siblings, and the child of that Sim. However, if you click the sibling, it will show their family tree, with spouse and children.
When I first got the game, I was confused, because I had sister of the sim I was playing adopt children, and they didn't show up until I had clicked on the sister.
Also, I found out that pets don't have a family tree, but the game does keep track of the pets offspring to at least their own great great grand children at least. However, it doesn't recognize dogs that would be "in-laws." I have two female dogs, who the game doesn't register as family, but the game keeps track of both of them being respective aunts to their siblings' offspring.