I have Virtual Families for my iTouch and am worried about the house not going to the next generation. I have already sent one child to college. Will it got to the next generation once they all leave?

Once one of the parents dies, you will get the option to start a new generation. You can choose one of the children to inherit the house. Everything in the house will remain as it was before starting the new generation.

Just to add that when the mother and/or father have died you will be able to choose from all the children, including those who've left for college, to decide who will inherit the house and start the next generation.