You stated these grandparents had a will that listed their son as the beneficiary of their house. Well, based on what you've posed here, the answer to your question will depend upon what the will says.
If the will says if the son predeceases them, then the house should go to his wife, it may still go to his wife...
One should mention however, that that is very unlikely. Estate Planning Attorney's who draft wills usually have the real property in situations like the above then pass on to the deceased son's children.
Or they could pass the property on by alternating specific bequests, if the testators are very detail oriented about their estate's property.
Typically, If the granting of the home were by 'specific bequest', and the recipient of that specific bequest dies before he is able to inherit, then the home would most like go into the residuary estate and be passed along per the instructions for disposition for that part of the estate.
It maybe wise at some point to seek legal counsel to deal with this matter. However, given the sensitive nature of these events, now may not be the time.
My condolences for your loss.
I agree with most of the points that Mr. Kennedy stated in his answer to you.
He is absolutely correct that the results will depend on what the Will says about alternate beneficiaries. However, California has what is called an "anti-lapse" statute that states if a beneficiary "fails to survive" the person making the gift, the "issue" of the deceased beneficiary receive the gift in place of the deceased beneficiary unless the Will expresses a contrary intention or makes an alternate disposition.[Cal. Probate Code Sec. 21110]. It goes on to state that if the Will requires the beneficiary to survive the person making the gift, that will be considered a "contrary intention".
So, for example, if my Will says "I give my house to my son if he survives me" and my son does not survive me, then the house passes pursuant to other provisions of the Will.
Assuming a competent estate planning lawyer drafted the Wills, it probably provides something like "if my son doesn't survive me, then this gift shall be distributed to my son's issue by representation (or by right of representation)." In that case, the Will, in effect, provides that the gift is distributed to the son's children (you and your siblings, if any) who are alive at your grandparents' deaths and to the children of any deceased children.
It is unusual (but certainly not impossible) for a Will to provide that the gift would go to the son's wife if the son were deceased. But I have clients who have done that, so I won't categorically state that "it would never happen".
Two other things to mention ... first, if your grandparents sell the house before their deaths, then the gift "lapses". Second, if you do inherit the house from them make sure you check with a competent estate planning lawyer ASAP - you might be able to keep your grandparents' property tax rate under California "Proposition 58" [the little-known "grandparent-grandchild property tax reassessment exclusion].
I would urge your grandparents to revise their wills.
If your grandparents live in CA, then CA law will apply. I'm in Texas and I don't know CA law.
You definately need to consult with a probate and estate planning attorney in their state.
You might try www.lawguru.com to find an attorney in their state.
If they refuse the revise the will, then whatever the law is in their state will apply.