Friends say Williams (with Matilda last September) will lean heavily on her mother, Carla, in the months ahead. "She will surround herself with healthy, supportive people," says one friend. "Her priority will be Matilda, and she will stay strong for her." Photo by: Jason Winslow-Brian Prahl / Splash News
A Fairy Tale Gone Wrong| Heath Ledger, Michelle Williams (Actress)
During those late nights, say sources, Ledger often used cocaine, and his partying became an issue in the relationship. "In the end, there were too many differences," says a friend of the couple's. "She kind of turned her head to those at the beginning, but when Matilda was born was really when she started to reevaluate things." Another friend says the couple wanted to stay together but couldn't find a way to make it work. "I don't think they fell out of love; it was probably tough love on Michelle's part," says the friend. "She was doing what she had to do."

After the split, Williams stayed in Brooklyn while Ledger moved into a $23,000-a-month loft in Manhattan. Initially the breakup was amicable, and they worked out a custody agreement for Matilda. But away from his family, Ledger delved deeper into the party scene, hanging out with Lindsay Lohan, model Helena Christensen and Mary-Kate Olsen.

But he also doted on his young daughter and reveled in the time they spent together. "She was always on his shoulders," says Michelle Vella, a SoHo designer who has worked with the couple. "You don't see men acting so comfortably with their kids. It was amazing." In the weeks before his death, Ledger furnished a bedroom in his loft that looked like Matilda's room in Brooklyn. She had just grown too big for a crib, so he picked out a toddler bed for her and just before Christmas bought her a big stuffed sheep "so she could lie on it while she watched TV," says Vella. "They came in and bought it together. Matilda picked it out."