What is the ruling on a grandfather's agreement with his children to divide his property, documented in a paper witnessed by the children, on condition that the property remains in his possession and under his control until his death, and then, after the death of one of the children (the questioner's father), the grandfather invalidates this agreement? Do the children (heirs of the deceased father) have a right to inheritance as a result of this?

What your grandfather did oscillates between a gift (hiba) and a bequest (wasiya). You have no claim to anything from him, as long as he tore up what he wrote and retracted it.

If, by that writing, he intended the properties to go to his children after his death, then it is a bequest to an heir, which is forbidden by Islamic law.

And if, by that writing, he intended the properties to go to his children during his lifetime, then it is a gift (hiba). A gift is not binding until possession is taken. If he did not give them possession and then retracted, they have no right to it.