"I have accepted that fate. Now, so I may make my final peace with the Nine, please rejoin my hand to my body. Only then, when I am complete, will this eternal nightmare end."
Lorgren Benirus[src]

The Skeletal Hand is found in an urn on top of a cupboard in the Benirus Manor in Anvil.

During the quest "Where Spirits Have Lease," an urn will fall down from the cupboard and break into pieces on the floor while the Hero sleeps in the manor for the first time. There they will find the skeletal hand with a scrap of paper from Lorgren Benirus' diary.

When his grandson, Velwyn, opens the secret door in the basement, it will reveal a secret necromancy laboratory with the skeletal remains of Lorgren. He claims that he was been awaiting a change to atone for his sins, but needs his hand to rejoin his body so he may end his eternal nightmare and make peace with the Nine. However, when his hand is rejoined, he regains his full power and attacks, hoping to finish with his plans of immortality.