components that don't touch can't have their nodes merged and therefore can generate high stresses because htey are bonded with rigid beams
make a configuration specifically for simulation where they are touching. this is sometimes something you have to do.
Even if you extended the geometry, you could still have high stress areas, which may or may not be realistic. Very sharp corners result in singularties, were the stress will continue to increase (i.e. not converge) as your refine the mesh. The best way to handle this is to refine the mesh enough so that the singular elements are well within the weld region, and then look at the stresses outside of the weld region. You're using Saint-Venant's Principle to argue that failure outside of the weld region will not happen.