Must the flags that the grandfather took from the Kuwaiti Ministry of Defense during the invasion be returned? And are they considered a debt upon him after his death, bearing in mind that more than 20 years have passed since the incident?

There is no sin upon the grandfather if he took the flags to protect them from damage and loss, and he must return them afterwards. You must now return the flags to the authority responsible for them. Whoever tampers with them is liable for their guarantee, due to the hadith: "Upon the hand is what it took until it returns it," and because among the reasons for guarantee are causing loss and placing a hand that is not entrusted. So, whoever tampers with the flags has caused their loss and is thus liable for them.