Jacob, whom the Lord named Israel, had twelve sons, namely: Reuben, Simeon, Levi, Judah, Issachar, Zebulun, Joseph, Benjamin, Gad, Asher, Dan, and Naphtali. Each became the ancestor of a tribe in Israel and received patriarchal blessings as such when Jacob went down into Egypt. He also blessed the two sons of Joseph, Manasseh and Ephraim, and adopted them as his own sons, and they were blessed as founders of tribes in Israel.
The idea that these two sons of Joseph replaced Reuben and Simeon springs from the words of Jacob when he chose them for adoption, as recorded in Gen. 48:5, as follows: “And now thy two sons, Ephraim and Manasseh, which were born unto thee in the land of Egypt before I came unto thee into Egypt, are mine; as Reuben and Simeon, they shall be mine.” A careful reading will show the true meaning to be that they should be sons of Jacob just the same as Reuben and Simeon were, not that they were to replace them. Then again some confusion has come because it is recorded in 1 Chronicles 5:1 , that while Reuben was the firstborn, because of his transgression the birthright was given unto the sons of Joseph. The matter of birthright, however, did not have anything to do with a place among the tribes of Israel, and Ephraim was not substituted as a tribe for Reuben.
When Israel came out of Egypt under the guidance of Moses, the Lord prepared to make of the twelve tribes a royal priesthood and honor them by choosing from among them faithful men to hold the Melchizedek Priesthood. Because of their constant rebellion and murmuring, in which they had Aaron make for them a golden calf to worship when they thought that Moses was dead, the Lord’s anger was kindled against them. Therefore he took Moses and the Melchizedek Priesthood from them and left them with another authority or priesthood, which he bestowed upon Aaron and his sons, and chosen men of the tribe of Levi,1 to be the priests and ministers for all the tribes of Israel. According to this calling Aaron and the tribe of Levi, to which Aaron belonged, obtained this great honor, and henceforth the Levites were not numbered as one of the tribes, for the Lord said he would scatter them through all of the tribes to be their ministers and their priests. 2
So the tribes of Israel lost the glorious privilege of holding and officiating in the Melchizedek Priesthood, and in his anger the Lord added to what he gave them, the carnal law, which continued with Israel until the resurrection of Jesus Christ when it was fulfilled. 3
We discover that it was Levi and Joseph who were not numbered as tribes in Israel. Joseph received a double portion through his sons, each inheriting through their adoption by their grandfather, and Levi’s descendants becoming the ministers to all the other tribes of Israel. 4
Numbers 1:47-49, 3:12-13
3 Nephi 15:3-6
Joseph Fielding Smith, Answers To Gospel Questions 1:112-114