Although this decision is hard, I've listed below a few quick tips for making the decision.
1. Strength of Relationship: You want to pick a guardian who has an on-going and permanent relationship to you. In most cases, relatives are the best choice because the relationship is more permanent. After all, your sibling is always your sibling, regardless of ups and downs in the relationship. As fond as you might be of your book club friends or that old college roomie, consider whether those relationships are more transitory or superficial. Family relationships tend to be stronger, albeit fraught with conflicts at times.
2. Values: If you have the luxury of picking between several choices, consider whether the guardian you choose is a good match to your values. For example, if you are religious, pick a guardian who will raise your child in a religious home. If academic achievement is important, choose a guardian who respects that view. Remember, the guardian takes over after you die; once you are gone, your ability to influence is over. Pick someone who will raise your kids as you would!
3. Age: Play out the scenario of your child being raised by the guardians you choose, and you will see the importance of the age of the guardian. For example, if you have a two-year old child and you choose your 70-year old mother as guardian, then your mother will be caring for your child until age 86, when your child turns 18. This is simply impractical. Although grandparents are often loving and very involved, it is often better to choose a younger person.
4. Desire: Pick a guardian who wants to play that role. If you sense hesitation, have an open conversation about the matter. Raising children, especially someone else's, is no small matter.
5. Don't Worry About Others: When you pick a guardian, someone in your family may have their feelings hurt. Remember, however, that this is about making the best choice for your kids. Don't make it about pleasing others.
6. Practical Concerns: There are a number of practical concerns one must also consider: location of guardian, ability to raise kids, other obligations that the guardian has (such as other children), etc. Picture your kids with the guardian of your choice and try to imagine the problems that may arise. This may help you pick the best person.