Hilary Swank and Chad Lowe's marriage had always seemed to be one of Hollywood's strongest—and sweetest. When they separated in December, not even hardened 60 Minutes vet Mike Wallace, who befriended the pair after interviewing them last year, saw it coming. "I called Chad," says Wallace, "and said, 'Hey, hang in there. It's none of my business, but you guys are good people and good together.'" That hoped-for happy ending was not to be. After spending several months attempting to reconcile, Swank and Lowe "have jointly decided to divorce," their lawyer, Jeffrey A. Bernstein, told PEOPLE. "They continue to be friends and have the utmost respect for one another."

It was a sobering decision for Lowe, 38, and Swank, 31, who did almost the unthinkable in Hollywood—they tried to heal their relationship. After announcing their separation last winter, the pair, who met at a Hollywood party in '92, went to counseling and made a point of going out as a couple. Last February they were spotted lunching at Malibu's Tra di Noi restaurant, and in March got cozy on a JFK-LAX flight. A friend of the pair says that Swank's busy acting career wasn't a factor in the breakup (in recent years Lowe has focused on directing). "They both sincerely tried to make this work," says the source, "but the simple truth is that they grew apart." For now, they will continue running their production company, Accomplice Films, and have not said how they will divvy up their pets (including two dogs and two birds) or homes in New York City and Los Angeles. "They'll always love each other," says the friend. "They just won't be married."