The type of tool you might be referring to is called an "Adz".
It's an axe-like tool where the blade is at a right angle to the handle, the blade is curved for shaping wood.
Adz aka adze.
The adz.
axe
awl
pee has 3 letters
Bug.
Eel
wag
bus
pez
mat
mum
Awl
A wood shaping tool that is three letters could be: - Adz - Awl - Axe - Saw