We don't have wills (I know! Need to get on it), but have spoken to family about it. We'd like my sister and her husband to be guardians of our two kids. My parents are aging, and they've had their time raising kids. My MIL has spent almost her entire adult life as a single parent, and is also not someone we'd want raising our kids. FIL lives interstate, and we wouldn't want the kids uprooted from everything they've known here.
My sister lives 5 minutes from is, kids see her all the time, and she's agreed to be their guardian. I know hat's not legally binding, but it's what we'd want.