According to a FAQ that can just be opened on the Xbox Live support website, all current Xbox Live Gold Family packs will be converted into individual Xbox Live Gold memberships.
The Gold Family pack provides discounts to households where multiple subscriptions need to be maintained, these discounts will no longer apply. To compensate those affected, Microsoft is adding on three months of free Gold membership to each of the accounts in addition to the current subscription time already purchased. Keep in mind that the changes do not go through until the end of the month (August 27th).
One thing to note is that you cannot have more than 36 months of Gold membership in your account at any one time, so if you and your loved ones are already topped up you won’t be getting any free time. Additionally, you will no longer be able to access activity monitoring reports for Xbox Live Gold Family Pack users or exchange Microsoft Points between users.
In a related bit of news, Microsoft Points will be permanently replaced by real-world currency upon the next Xbox 360 system update. Each account with Microsoft Points still not converted before the transition will have their balances translated to local currency when users of each account initiate a purchase or redeem a Microsoft Points card.
Remember to use the “add or update the billing information” option for each new Xbox Live Gold plan to initiate the auto-renew feature as only the primary Gold account in the plan will be renewed automatically following the transition.
If you want to review the FAQ and all the additional information it provides, or just want to talk to Microsoft support about something, click here.