Then the children -- Prince, Paris and Blanket -- were told.
"Paris was screaming, looking up at the sky saying 'Daddy, I want to go with you, I can't live without you,' " she testified. "Paris looked at me and asked 'Grandma, where are we going?' I told her 'You're going home with grandma.' "
Paris has had "the hardest time" since her father's death, she said.
"One of my grandchildren told me that she would tell them that she wants to go where her daddy was," she said.
Now 15, Paris has been in a psychiatric facility for treatment since a suicide attempt on June 5.
Jackson lawyers punctuated their presentation with a montage of home videos of Michael Jackson with his children, using a recording of his song "Speechless." Jackson said her son wrote the song about a father's love for his children -- and the lack of words to express it -- in just 45 minutes.
Cross examination by AEG team
Putnam's questioning of Katherine Jackson began when he inquired whether it was her personal decision -- or someone else's -- to file the wrongful death lawsuit.
It was hers alone, she said. She did not discuss it with her husband or grandchildren.
"I've heard a lot of stories," she said. The trial may bring her answers, she hoped.
"I want to know the truth, what happened to him," she said.
Jackson appeared upset, complaining about the suggestions by an AEG Live lawyer last week that her son was broke when he died.
"Because he gave it to charity," she said. "It hurts to sit here and listen to all those things."
She complained to Putnam that AEG Live executives did not call "an outside doctor" to help her son after show director Kenny Ortega told them he needed urgent help in his last days.
"My son needed another doctor, not Dr. Murray," she said.
Jackson then recalled an e-mail written by a top AEG executive referring to Michael Jackson as "the freak" just hours before their company signed the pop icon to a huge concert deal.
"They called him a freak," she said. "They were making fun of him -- 'Finally get a chance to meet the freak.' "
"My son is dead," she said. "He's not here to talk for himself."