William was a Protestant, the religion of the House of Nassau. He married Princess Marie Anne of Portugal, believing that a Roman Catholic country ought to have a Roman Catholic monarch. Thus his heirs have been Catholic.
At the death of his uncle, Prince Nikolaus-Wilhelm in 1905, the only other legitimate male in the House of Nassau-Weilburg was William's cousin, Georg Nikolaus, Count of Merenberg, the product of a morganatic marriage. So in 1907, William declared the Counts of Merenberg non-dynastic, naming his own eldest daughter Marie-Adélaïde (1894–1924) as heir presumptive to the grand ducal throne. She became Luxembourg's first reigning grand duchess upon her father's death in 1912, and upon her own abdication in 1919, was succeeded by her younger sister Charlotte (1896–1985). Charlotte's descendants reign until the present day.
He was the last monarch of Luxembourg to die whilst still on the throne.
On 21 June 1893 in Fischhorn Castle, Zell am See, he married Infanta Marie Anne of Portugal, daughter of the Usurper Miguel of Portugal and Adelaide of Löwenstein-Wertheim-Rosenberg. The couple had six daughters:
Although the duchy of Nassau was annexed by Prussia after the Austro-Prussian war of 1866, the title of Duke of Nassau was retained by William and his heirs. This does not imply any sovereignty over Nassau.