(MONEY Magazine) - On Memorial Day weekend in 2005, Ken Johnson and Kim Barbel-Johnson had planned to be on vacation in California, celebrating their daughter Joi's second birthday with their six-year-old son Joshua. Instead, Ken was at a hospital in Arizona, where his sister Tanya, 34, was dying of kidney failure, and Kim was home in Florida making arrangements for Tanya's sons--twins Derrion and Deondre, now 12, and DJ, 14--to start their lives over with them in Jacksonville.

Becoming parents to three more children wasn't something Ken and Kim had planned for. Though the boys' father had died three years earlier and Tanya had been ill with lupus for many years, she'd never formally named Ken and Kim as guardians. But she had told her mother that she wanted her brother and his wife to care for the kids. "When it happened, I realized that there were so many things that were not said or planned," says Ken, 38, a commercial pilot currently on active duty with the National Guard. "It would be so much easier if we had talked about this before." Adds Kim, a 40-year-old physician: "It's a full plate, and a new family doesn't come with instructions."

It's hard to imagine that you'll ever be in Ken and Kim's situation. After all, it's rare for children to lose both parents. What is more likely is that someday you'll be asked by a family member or friends to be a guardian for their children. It's natural to turn to someone you trust to raise your kids. And it's equally natural to say yes right away when asked. After all, you're probably honored to be chosen, or you may fear that you'll offend if you say no. But a quick yes can lead to problems later. "There's a lot you can do before someone does die to make things easier," says Mary Randolph, author of The Executor's Guide: Settling a Loved One's Estate or Trust. Becoming a guardian is a life-changing responsibility. Before you say yes, follow these steps.

Leave Nothing to Chance. No question, it's uncomfortable to discuss the possibility of a friend's or family member's death, even if he or she brings it up. But having a detailed conversation in advance can make a tragic event easier to navigate. Ideally, anyone asking you to take on a heavy responsibility is prepared to talk--but it may be best not to do it on the spot. Schedule a time when you can ask a lot of questions. Would the kids move in with you? Will the estate be big enough to support them, or will you have to pitch in? Make sure you know how the parents want their children to be educated and even what their values are so you can abide by their wishes, as well as make sure you're right for the job. For Ken and Kim, it helped that the family was close. They spent summer vacations together, and Tanya often consulted Ken about the kids--when the boys wanted to have their ears pierced, Tanya had them call Ken first. Ken and Kim formally adopted their nephews in July. Even so, the transition isn't easy. "We were the fun aunt and uncle," says Kim. "Now we have to be the people who tell them to do their homework."

Talk About the Money. Guardians face many practical challenges, but the biggest can be financial. Though Ken and Kim have a comfortable six-figure income, they are facing new financial stresses, especially because their nephews didn't inherit any money. Children under 18 aren't allowed to manage sizable assets, so the guardian typically controls money left to the kids and uses it for their expenses, from clothing to education. But some costs of raising a larger family aren't clear-cut, like buying a roomier car or putting an addition on the house. Nihara Choudhri, a lawyer and author of Parent Savvy, recommends that parents leave money directly to the guardian to help defray extra household costs, perhaps through a simple trust or an inexpensive term life insurance policy with the guardian named as beneficiary. If you're uneasy with managing the children's money, ask that someone else be named financial guardian.

Get It in Writing. Once you agree to become a guardian, make sure that the person who asks you has spelled it out in his or her will. "It's not good enough just to tell people," says Terry Hammond, executive director of the National Guardianship Association. You might also request that the parents compose a separate letter of instruction that spells out their reasons for naming you and their hopes for their children and attach it to the will. Without explicit instructions in hand, you could find yourself arguing with family members over who is best suited to handle the task. Perhaps your sister asked you to be guardian because you live closer or are more financially stable than your brother. Your job will be easier if everyone understands why you were picked.

Don't Be Afraid to Say No. Clearly, being a guardian can be tough. Would your job get in the way? Would you have to move? How would it affect your own children? You can turn down the role after a person dies, but then a judge will name your replacement. Be honest in advance so that the parents can find someone else.

As difficult as losing Tanya has been, Ken and Kim say they are proud that Tanya entrusted them with her children. Their only regret is that they didn't talk through some of the more practical issues while Tanya was still in their lives. "It's never too early to plan," says Ken.

3 fast fixes

PAYING FOR TWO, UH, FIVE KIDS

Taking in their three nephews has been a shock to Ken Johnson and Kim Barbel-Johnson's finances. Certified financial planner Gary Marsh of Lincoln Financial Advisors in Jacksonville suggests three ways they can manage their growing expenses as well as save for five children's education and their own retirement.

1 Grab government help.

Ken and Kim can apply for Social Security for their nephews. Orphaned children can collect 75% of their mother's or father's benefits (whichever is higher) through age 18 (or 19 if they are still in high school). Also, with three additional dependents, Ken and Kim will pay less income tax going forward, so they should adjust their tax withholding to put more money in their paychecks right away.

2 Pay yourself first.

Ken and Kim cut back 401(k) and IRA contributions to free up cash for living expenses and college savings. "They need to move retirement to the front of the line," says Marsh. "No one will pay for retirement, but the kids can get aid for college." He advises saving 15% of their income for retirement, or at least enough to earn the full employer match in their 401(k)s. After age 50, they can make catch-up contributions to their IRAs and 401(k) plans.

3 Be creative with education.

The couple should keep funding their youngest children's 529 plans; they have plenty of time to save and see that money grow. For their nephews, they can look for scholarships for children with deceased parents. Two good resources are Orphans.org and FastWeb.com. Since Kim works at a state university hospital, all five children are eligible for free tuition at more than 300 schools through the the Tuition Exchange Program (cic.edu/tep).

Do It Now

If you've been asked to oversee a friend's or family member's kids, don't say yes until you've posed detailed questions. It may be awkward not to say yes right away, but a serious talk now will ease matters later.

plan

Rules of the Game by Ryan D'Agostino 42

Book your kid's summer camp now 45

The Long View by Walter Updegrave 50