May I suggest a workaround to the smart album.
1 - open the Keyword pane (⌘+K).
2 - add a keyword for every person you want to have have in a smart album, i.e. all immediate family and extended family.
3 - go to the People and Pets section and click on a person.
4 - under the top phots click on the Show More link:

5 - select the first photo in the Show More and select all (⌘+A).
6 - bring up the Keyword pane and add the keyword for that particular person.
7 - as new photos are added to the library apply the appropriate keyword to those with people in it.
8 - repeat Steps 3 - 6 for each persons in the People & Pets section of the libraray
9 - create a Smart Album with the criteria "Keyword is 'xxxx'" for each person.  
As you add photos to the library and keyword them they will show up in the Smart Album immediately. 
I've done the above  for my 55,000 family Photos library. It's easy to get photos with a given person in them or with two people in them with a smart album for 2 keywords.
Just some food for thought.
