An STT-MRAM device incorporating a multiplicity of MTJ junctions is encapsulated so that it dissipates heat produced by repeated read/write processes and is simultaneously shielded from external magnetic fields of neighboring devices. In addition, the encapsulation layers can be structured to reduced top lead stresses that have been shown to affect DR/R and Hc. We provide a device design and its method of fabrication that can simultaneously address all of these problems.