Kiddo is very concerned with relationships and locations right now - specifically those of parents. She spent most of the trip to my parents referring to her grandparents as "your mom and dad." (In fact one day, she asked me where Grammy was. I told her she was at a meeting, and she very sincerely told me, "Don't worry, your mommy will be home soon.") This led to conversations about Kiddo's Daddy's mom and dad, and where they live. Grandma is easy. Kiddo's paternal grandpa, who died before she was born, is a different story. We simply tell her (truthfully) he is in heaven with Heavenly Father and Jesus.
It took a few tries to work out any questions, but now she knows where to locate all the grandparents.
Yesterday we were taking Daddy to work. As we were getting ready to walk out the door Kiddo stops, and says, "What do we do before Daddy leaves for work? We pray!" and then started in. She was grateful that we could go on planes to all the places where mom's mom and dad and daddy's mom were. Then she was grateful that Daddy's Daddy was in heaven with Heavenly Father and Jesus.
We are too.