Drawing Weapons

I was thinking about it today and I realized I have a problem. Now, for my game, were going to have tons of attack animations. They will use swords, staffs, bows, etc. This seemed fine accept for a small problem, our characters are whole sprites. Not divided up into parts. Now heres what im thinking. When we have things that have to appear OVER the body but UNDER the arms, were gonna run into a major problem. Im guessing making a seperate EXE and creating a custom animation format, is the first step to solving this prob. I really dont want to but im thinking we might have to butcher the characters now Any ideas on how I should go about doing this?

Just make "holes" in the weapon sprite where the hand will be over it, like the attachment.

Nice drawing Oafo...but Sollie, he has a point :)