I want to address something and hopefully give some (much needed) positive conjecture on the matter of the kids.
It's been posited that the children are not with family currently due to the repeated use of the term "foster" in reference to placement. In Minnesota, the law is very clear that for any extended period, which is what this hearing was for, children must be placed with licensed foster parents.
However, and this is the good news, Northstar, the program that governs the entire foster program, has a very robust kinship placement and assistance program, which will seek out and work with family members to become licensed foster parents in order to take a kinship placement. There are specific provisions to waive the license requirement as long as the placement is with kin and the kin the children are being placed with are actively working to become licensed.
In summary, it is very likely, in fact almost a certainty, that the children have never been and will not be outside of the care of relatives. Robert Rakeita being at the hearing is a good indicator that the family is taking this seriously and working to take care of the children.