You click the family button and at the top it says something like new generation, click on
that and you will choose from their children. You can do this for as long as you want.

Do you have the lite version or full version? If you have the lite version (like me)then
no you cant do anything you have to start a new game and the current one will be erased

Go to the family tree and click new generation for your kid at college to take over the
house :)