"He is alive in my heart and in my head. Every day I talk to him," Ledger's sister, Kate told PEOPLE Thursday night at the sixth annual Australians in Film Breakthrough Awards, which honored Ryan Kwanten and Chris Hemsworth, in Los Angeles. Kate and Ledger's mother, Sally Bell, were on hand to watch Colin Farrell present up-and-coming actress Bella Heathcote with the Heath Ledger Scholarship.
"It is very special," Kate said. "It's honoring our boy so we couldn't be prouder and we think it is an amazing scholarship that is going to give so many opportunities.
His mother added, "He had a huge passion for acting. That was the most important thing for him. It wasn't about the money. He had such a passion that just showed through regardless of how big the role was."
Ledger's family said it comforts them to know he will be forever immortalized in films, but Kate admitted that "we haven't been able to watch any."
"We find that too difficult," the late Oscar winner's mother added.
Bell also gushed about her granddaughter, Matilda, Ledger's daughter with actress Michelle Williams.
"She is amazing. We keep in touch with Michelle and Matilda a lot. We spend as much time together as we can as a family and on Skype and phoning."
When asked if she sees pieces of Heath, who died in January 2008 from an accidental overdose, in Matilda, Bell quickly responded, "Absolutely."
"In some of her movements it is just naturally in the way she moves. But there is a lot of Michelle there as well."