A method for forming power semiconductor devices having an inter-electrode dielectric (IPD) layer inside a trench includes providing a semiconductor substrate with a trench, lining the sidewalls and bottom of the trench with a first layer of dielectric material, filling the trench with a first layer of conductive material to form a first electrode, recessing the first layer of dielectric material and the first layer of conductive material to a first depth inside the trench, forming a layer of polysilicon material on a top surface of the dielectric material and conductive material inside the trench, oxidizing the layer of polysilicon material, and forming a second electrode inside the trench atop the oxidized layer and isolated from trench sidewalls by a second dielectric layer. The oxidation step can be enhanced by either chemically or physically altering the top portion polysilicon such as by implanting impurities.