If your own letter to the school, as her legal guardian, acknowledging her placement by you with your daughter in law is not enough, your daughter and daughter in law need to go to court and complete the forms for a guardianship of a minor.
A 17 year old can nominate her own guardian. On the petition form in Massachusetts there is a designation that your daughter can sign before a notary public. Your daughter and daughter in law can fill out the forms at the courthouse. You as parents can sign the document giving your assent. You won't have to appear in court but the proposed guardian and most likely the nominating ward will have to when they wish to make it permanent.
I concur with Attorney Twombly. However, you might also consider consulting an attorney to draft a special power of attorney granting in loco parentis authority to your daughter-in-law. Such a power of attorney will grant your daughter-in-law the rights you possess as a parent, but will not extinguish or disable your parental rights. You may limit it to a specific time frame, specific powers and you may revoke it at any time. Third parties will be protected from legal liability for dealing with your daughter-in-law as a parent, but are not required to accept powers of attorney. Thus, you should check with the school to ensure they will accept an in loco parentis designation. They should. Such powers of attorney are routinely used by single parent military members to designate other relatives to act as parents during their often lengthy deployments.
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You can grant her a power of attorney.
henry lebensbaum, esq.
300 Brickstone Square, Ste 201
Andover, ma 01810
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I agree with both the answers above. However, not knowing all the facts, and if what you want is for the child to be enrolled in school in MA then a Massachusetts Caregiver Authorization Affidavit may work. The Caregiver authorization affidavit is for education and health care for the child. It does not require going to court. The Caregiver Affidavit does not give custody. It only allows the caregiver the right to make medical and educational decisions for the child.
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As an appropriate parent, you can always entrust your child to a responsible caretaker. You can draft a document acceptible in your state pursuant to its laws to transfer custody. Retain an attorney in the state where the parent and child reside.