An improved and novel device and fabrication method for a magnetic element, and more particularly a magnetic element (10) including a first electrode (14), a second electrode (18) and a spacer layer (16). The first electrode (14) and the second electrode (18) include ferromagnetic layers (26 & 28). A spacer layer (16) is located between the ferromagnetic layer (26) of the first electrode (14) and the ferromagnetic layer (28) of the second electrode (16) for permitting tunneling current in a direction generally perpendicular to the ferromagnetic layers (26 & 28). The device includes insulative veils (34) characterized as electrically isolating the first electrode (14) and the second electrode (18), the insulative veils (34) including non-magnetic and insulating dielectric properties. Additionally disclosed is a method of fabricating the magnetic element (10) with insulative veils (34) that have been transformed from having conductive properties to insulative properties through oxygen plasma ashing techniques.