Dr. Monzer Kahf, a prominent Muslim economist and counselor, states: “There are opinions in our rich Fiqh heritage that consider the grandchildren of a deceased child among the heirs. This is taken up under a title called Al-Wasiyyah Al-Wajibah (an obligatory last will) that can be imposed by the government. Several family laws that are derived from Shari`ah in several Muslim countries have taken that approach. These include Egypt, Syria, Algeria and others.
This will work as follows: The law mentions that children of a deceased child take the share of their father provided it does not exceed one third of the total estate. If it does they only take the one third and the rest goes to the uncle and aunt (this happens only if the grandfather is survived by no more than one uncle and one aunt).