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The grandchildren will inherit if they are the only relatives.
Next of kin is meaningless really. If the grandchildren inherit, they would be expected to obtain Letters of Administration for your grandmother's will (assuming it doesn't name a living executor). The Probate Office won't care which of them applies - though it will probably want at least two of them to do so jointly, or for them to appoint a solicitor to do so..
Power of attorney would not automatically be passed on to someone else - it would have to be specifically authorised. However, if your grandmother is mentally sound and can sign things, I doubt if a PoA is necessary at all.
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