I'm not an expert or anything but I have worked with preschool children dealing with death and have had some grief counseling training. I currently am a small group leader for 4-6 yr olds dealing with difficult situations (death, divorce etc....) -- but like I said I am not an expert Be honest and straight forward. Tell them the truth in basic facts. Grandma died and went to heaven (if that's what you believe). She is happy their. Let it at that but answer any questions they have simply and truthfully. Don't use euphamism (gone to sleep, went away etc...) This will only confuse them. Children do process grief but they process it differnetly then adults. They will process what they can then put it away for a while then may process more later. Be there when later comes -- do not try to brush it away. Be honest and truthful with any questions, but believe what you say.