How do we recover money my deceased grandmother loaned out?

Was there a written agreement as to the loan, the interest rate and the payback terms?  Anything that would be considered a valid note to sue on?  Take what ever you have to an attorney to review and give you some guidance.  You are going to have to sue them, plain and simple.  Where will depend on the facts.  If the loan is considered one lump sum then it may be too big for small claims court.  But if you want to treat each check as a separate loan and not one transaction then you may be able to sue for smaller amounts separately.  But you need help from someone who can look at what you have and the evidence that you are going to present in court.  Even on a consultation basis it would be best.  Good luck.

IF there was an agreement to repay the money, that agreement can be enforced by your grandmother's estate. However, showing that she paid checks to the neighbor itself  may not be enough to prove either the existence of the loan or its terms. For example, checks could be a gift, could be payment for goods or services, etc.; even if the checks say, for example, "loan," what exactly does that mean? Is it a loan due in 1 year, 5 years, 10 years? Is it due in all circumstances, or only under certain ones? Or do the checks say "loan" because your grandmother was repaying a loan made to her?

 Also, certain loans or agreements may have to be *fully* in writing to be enforceable.

For "thousands of dollars," it is worth consulting with an attorney who can evaluate the situation for you and determine what rights you may have, and how best to proceed. You should prepare yourself, however, that you may not be a good position, without more than you wrote about, to recover the loan.