01/22/2008 at 11:15 PM EST
Michelle Williams was on location in Sweden, believed to be with 2-year-old daughter Matilda, when she got the news: Heath Ledger
was found dead
in New York at age 28.
"She's devastated," says a source close to the 27-year-old actress.
Although their three-year relationship didn't last
, Williams and Ledger could always agree that their daughter comes first.
"He was absolutely in love with his daughter," says another source. "And he really liked what he did [acting]. He spoiled [Matilda] rotten. He was playful and very funny with her."
The source adds: "I can't believe Matilda is going to grow up without a dad, without knowing her father. And that Michelle will have to deal with having a daughter who's lost her father. She's a survivor. She'll make it, but it's going to be hard. Her first concern is going to be Matilda."
Reporting by JULIE JORDAN and ALEXIS CHIUHeath Ledger: Life in Photos:
See all the actor's most recent photos – from life as a dad to being an Oscar nominee