As a condition for his release, he had to confirm Gunzelin III as the holder of the fiefs Schwerin held from Brunswick.
On 30 October 1230, Gunzelin III was engaged to Princess Margaret of Mecklenburg and Lord John I, who had just come of age, was appointed co-guardian.
His older son Helmod III received Schwerin, Neustadt and Marnitz and founded the Schwerin-Schwerin.
His youngest son Niklot I received Boizenburg, Wittenburg and Crivitz and founded the Schwerin-Wittenburg line.
In 1241 in Mecklenburg, Gunzelin III married a member of the House of Nikloting – Margaret, the daughter of Henry Borwin II.