I can see if a parent leaves behind young children and the family wants to set up a fund but not for grandkids. The only exception would be if the deceased were raising a grandchild.
I have seen 4 people we know have this in their obit.
2 were raising their grandkids, while getting no support - federal or from mom/dad - and their illness ate up a lot of their savings.
The other 2 were younger parents who passed before they could really build anything up. Instead of money being spent on plants and flowers, they asked for that money to be put into an account for the kids education.
In all four cases, we were more than happy to honor one of their final wishes.