All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.
We do not know of anything that was reported in the Sunnah of the Prophet or from his companions with regard to the method of putting the arms of a dead person. Ibn Hajar Al-Haythami was asked: 'How should the arms of a dead person be laid in the grave?' He answered: 'I did not come across any statements of our scholars with regard to the method of putting the arms of the dead in the grave. It appears that they kept silent because there is no Sunnah in relation to the method of putting the arms of the dead.' Nonetheless, some jurists stated that his arms should be laid along his body. Indeed one of the books from the Hanafi school reads: 'When a Muslim dies, his right arm should be put along his right side, and his left arm should be put along his left side.'
Allaah Knows best.