Legal Question in Insurance Law in California

My first reaction is that this sounds like a scam. Who is the letter from? Does it contain specific information like your grandfather's insurer, policy number, etc. (Note that his name, date of birth and date of death are public information; including only such details would make me more suspicious of the letter, not less.) Your father should proceed very carefully, especially if these folks ask him for money.

Assuming that the letter is authentic, it should explain what your father has to do. Payment of insurance benefits is usually a private matter. Courts and lawyers get involved only if one party believes another is violating his/her/its rights.