When creating a family for multiple generations, do you play all of the descendants?

Yup! On my legacy save, Garret (the founder) had a boy and a girl with Summer Holiday. When they died, I started to play with the boy in the same household and the girl married an alien disguised of asian Sim and moved to another lot.

Then I played with both households till they also got kids that had grown up and moved out. Now they are everywhere (one household on Newcrest, three on San Myshuno, one on Forgotten Hollow and one on Windenburg).