Heres a secret- no matter what you choose to do, it will be the wrong thing.

That's how enmeshed families work - there's constant drama energy among the players. That's where boundaries come in. You don't let the drama cross your border, and likewise don't send any in the other direction.

As far as the graduation, sit quietly with yourself and figure out what YOU want to do. Talk to your H, get on the same page as him, whether you both go, you go alone, or you don't go at all. Take into consideration what would cause the least upset to your neice- the day is about her, but the family drama has the potential to get in the way.

So you know, boundaries aren't about what anybody else is doing or how they're treating you. It's about not letting the garbage into your personal space, and not engaging in the enmeshed drama. If you do go to the graduation, prepare and practice 'greyrocking' lines. These are bland responses that don't feed drama. It may sound silly to prepare that way, but when you've been in the drama so long, it feels natural and automatic to engage in it, so changing your responses is difficult.

For the record, H's family is the enmeshment that I deal with. MIL is the primary instigator, the center of the circle. A few years ago, meek FIL was marvelling at how I "handle" MIL. It's not handling, it's just healthy boundaries, but those aren't allowed in an enmeshed family, so healthy boundaries seem alien. And that's one of the biggest obstacles in healing and changing- just not knowing where the "normal/healthy" line is.

Both you and your h could potentially benefit from learning more about boundaries. What normal ones look like and how to get them.