ANSWER:

This is not permissible as it is an innovation. Burying the umbilical cord after falling off is permissible but not mandatory as it can be thrown in the dustbin as well. 

I’m about to have a baby inshallah. my husbands family insist to do things like put a small mushaf in the baby’s bed (next to or under the baby) and bury the belly button when it falls off. is there any evidence for these things? I said no with the last baby and they became angry.