Yes, an abrupt change of cross-section tends to cause increased localized stress at the internal corner. In the case of timber design, the Code of Practice recognises this by reducing the allowable shear stress at notched bearings.
(This is the reason the old Comet jet airliners of the 1950s failed catastrophically, because their windows were square. The 90° corners became highly-stressed during repeated pressurizations of the cabin, leading to cracking of the thin aluminium skin at the rivets and eventual rupture).