When my sims die and have the flower it shows them just floating there and when Grim shows up there is a bubble or whatever you want to call it comes up and something along the line of how nice of you to give me a flower, I need to go home and put it in some water.
Then your sim should become "human" again and life goes on.
If this doesn't happen, they you could have a glitch in your game. So far when a sim dies I haven't ever had Grim not take the flower out of the inventory.
My sim once died in a fire and after he took her flower he stayed around to help put out the fire, caught fire himself, which was quite funny.
