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Thanks for your question.
It depends on how the Will is drafted. The residuary estate clause is the clause which directs where the remaining part of her estate will go following the deduction of funeral expenses, her liabilities, IHT and any other legacies in the Will. Normally a will drafted shall ask the testator what she wishes to happen if one of the residuary beneficiaries (ie.the two daughters) dies.
They will ask if she wants the residuary beneficiary's share to go to the residuary beneficiary's children (or husband/partner for example). If the testator wishes this to happen the Will shall be drafted to give effect to this. If she does not want this included and no other provisions are made for what shall happen to it then it will go to the surviving residuary beneficiary.
You cannot tell without looking at the Will. It's a sensitive subject obviously but you may wish to politely enquire with your grandma.
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Sorry if I was a bit unclear but yes, you're correct.