A lawyer for Smith's estranged mother Virgie Arthur told Entertainment Tonight after the hearing that she and Larry Birkhead, the baby's father, will "get together ... no lawyers, no press, to figure out what they believe is in the best interest of the child."
Smith's companion Howard K. Stern, who has been caring for Dannielynn, was present at the hearing. Another hearing has been scheduled for next Friday.
Birkhead, a California photographer who discovered he was the girl's father when DNA test results were disclosed on Tuesday, said he would not share custody of the baby girl, but hoped to avoid a court dispute. Arthur's lawyer said she would fight for joint custody if talks fail.
The baby has been living in an oceanfront home with Stern, who was listed on the birth certificate as the father but gave up his custody claim after the DNA results were released.
Smith gave birth to Dannielynn in September in a Bahamas hospital, days before her 20-year-old son, Daniel, died from a lethal combination of drugs at her bedside. Smith died in Florida in February at age 39, also from a lethal combination of drugs.
Legal wrangling continues over the estate of Smith's late husband, Texas oil tycoon J. Howard Marshall II, who died in 1995. It remains unclear how much, if any, of the $500 million estate Dannielynn could obtain and whether her guardian would have access to the money.