My wife and I have guardianship of our grandchildren. How can I legally change their last names?

Guardianship does not grant you the right to change their names. I'm glad for their sake that the two of you are willing and able to care for them but unless you adopt them their names will remain the same. However, on the flip side you can refer to them and call them whatever you want (as long as they like it) you just have to make sure for legal purposes to use their legal names.

First step would be adopting them or having permanent custody awarded...