Kiplinger’s magazine recommends designating a guardian for your children:
The guardian will have legal responsibility for any minor children. If you have minor children, this position requires the most forethought and consideration. The guardian will in many ways be stepping into the role as parent.
If you would like your children to attend private schools, and a life insurance policy provides them the money to do that, the trustee and guardian will work together to carry out your wish. Also, any instructions should provide context to help the trustee and guardian make the best decisions. For example, if you provide funds for a car that provides “reasonable comfort,” it could mean a Honda Accord for one person and a Mercedes-Benz to another.
Once you’ve decided on a person for each role, speak with them prior to signing your legal documents to ensure they understand their responsibilities.
In my experience, this is the most difficult decision for a family: who will have custody of the children if something happens to both parents? His parents? Her parents? His siblings? Her siblings? None of those? Do they have your religious preferences? Do you have specific instructions for them?