The generation of thermal stresses is a major cause for mechanical failure in encapsulated electronic components. In this study numerical modeling is employed to analyze thermal stresses in a high-voltage transformer encapsulated with filled epoxy. The transformer assembly consists of materials with an extremely disparate range of thermomechanical properties. The thermal histories considered mimic those in the operational condition. It is found that, upon thermal cooling from elevated temperature, the ceramic core can be under local tensile stress although it is entirely surrounded by materials with much greater coefficients of thermal expansion. The unique aspect of this paper originates from the fact that the volume shrinkage of the viscoelastic encapsulant during physical aging contributes to an increase in stress over time, thus increasing the tendency of fracture. This counter intuitive result (stress increase due to nonlinear viscoelastic physical aging) can now be predicted using constitutive models recently developed at Sandia National Laboratories. When a silicone coating between the core and the encapsulation is included, the stress is significantly reduced. The modeling result is shown to corroborate with the actual performance of the transformer.