By Sara Hammel/New York City Steve Helling/Sea Island Linda Marx/Miami Peter Mikelbank/Paris Liz McNeil Sharon Cotliar/New York City and K. C. Baker/New York City
Updated September 09, 2013 12:00 PM

With its cobblestoned streets, crystal-blue lakes and majestic mountains, the Quebec resort town of Mont Tremblant has been the Douglas family’s annual destination for a little late-summer serenity. So on Aug. 3, locals weren’t surprised to spot Michael Douglas strolling through the farmers’ market with his son Dylan, 13, and daughter Carys, 10. They checked out cheeses made by nuns and watched a cooking demonstration by a chef who dared the star to try his hand at the stove. “They all laughed,” recalls Diane Seguin, the market’s founder. “They seemed to have a good time.”

It looked like another picture-perfect vacation for the Douglas clan – except one person was missing: Michael’s wife and Dylan and Carys’s mom, actress Catherine Zeta-Jones. Back in the family’s home of Bedford, N.Y., that week, Zeta-Jones was seen grocery shopping and browsing a nearby consignment boutique with her mom, Patricia. Notes a local who saw her out solo a few weeks earlier: “She seemed a little down.”

Only the couple’s closest friends know exactly why they weren’t together. After nearly 13 years of marriage, Douglas, 68, and Zeta Jones, 43, one of Hollywood’s most powerful and admired couples, have decided to spend time apart, two close confidants tell PEOPLE. “Michael and Catherine love each other very much, [but] they’re taking a break,” says one. Neither has yet made a move toward a legal separation or divorce. Says the confidant: “No legal people are involved whatsoever.”

For years Douglas and Zeta-Jones – with their his-and-hers Oscars, luxurious estates from Bermuda to Mallorca, and a reported joint fortune of more than $200 million – found bliss together in their life atop the A list. But after weathering difficult health crises – Douglas with throat cancer and Zeta-Jones with bipolar disorder – they began leading increasingly separate lives in recent months. Though they looked cozy at the Oscars in February, in March the couple took what appears to be their last vacation together, visiting Sea Island, Ga., where they spent time walking on the beach, golfing and talking quietly. “They just looked like a couple who had been married for a while,” says an observer. On April 22, at a Barbra Streisand tribute in Manhattan, they held hands – but it was the last time they would appear in public together. A few days later Zeta-Jones, who was between acting projects, checked into treatment to manage her bipolar II disorder. Then Douglas headed to Cannes to promote his acclaimed turn as Liberace in HBO’s Behind the Candelabra. A friend who spent time with Douglas in Cannes noticed he wasn’t as chatty about his marriage as he had been in the past. “It seemed unusual,” the friend says, “but I wrote it off,” chalking it up to the fact Catherine was still in treatment.

After both returned home, Zeta-Jones was upset by what she thought were “embarrassing” comments Douglas had made in Cannes, says a longtime friend of hers. In one interview, he said that the HPV virus, transmitted through oral sex, was a potential cause of his cancer – without clarifying that he was exposed to the virus before he met Zeta-Jones. In another he revealed when she was coming home from treatment, though she would have preferred to keep that private. “Things went downhill from there,” exacerbating existing tensions, says her friend. They began appearing at events solo and privately decided they needed time apart.

Sources who know the couple well say the strain of the last few years – their medical problems and Douglas’s oldest son Cameron’s incarceration for drug dealing – took a steep toll on them. “It’s been very stressful,” says a family friend. “He loves Catherine, but she has her own issues,” adds another source who socializes with the couple in New York. “It’s sad.”

Douglas’s diagnosis with stage 4 throat cancer in 2010 hit Zeta-Jones hard emotionally: She told PEOPLE she struggled with seeing her dynamic husband “so fatigued.” Even after Douglas got a clean bill of health in 2011, Zeta-Jones suffered from bouts of sadness. She was diagnosed with bipolar II disorder, which explained her episodes of depression and anxiety. “There is no shame in seeking help,” Zeta-Jones said.

But the pressures haven’t been easy for the Welsh-born actress, who has said she was raised to have a “stiff upper lip.” Her friend says she is still “concerned” Douglas’s cancer could return. In a recent interview with the Daily Telegraph, she admitted his cancer shook her world. “I haven’t had to deal with anything like that before, ever,” she said. “I wasn’t as strong as I thought I could have been.”

Meanwhile, Douglas’s new lease on life gave him renewed energy. Emmy-nominated for Behind the Candelabra, he has several movies in the works. “I’m making up for a couple of years I missed,” he told PEOPLE in May. Behind the scenes, he and Zeta-Jones have traded off time with their kids while “still talking” to each other, a friend says. She was with them in Canada before Douglas arrived. In recent days the kids have been in Wales with her family while Douglas traveled to Sardinia, relaxing on a yacht called Faith, which rents for upwards of $480,000 a week. On Aug. 30 he is expected to attend the Deauville Film Festival in France, where he famously first met Zeta-Jones in 1998 and introduced himself, saying, “I want to father your children.”

Smitten from the start, the son of screen legend Kirk Douglas first saw Zeta-Jones onscreen in 1998’s The Mask of Zorro. “It was like when I saw Julie Christie. Wow,” he told PEOPLE in 2009. “We romanced each other slowly—controlled by Catherine.” Stars from Jack Nicholson to Martha Stewart attended their lavish wedding in 2000 at Manhattan’s Plaza Hotel. “He looked so happy, and so did she,” a guest said.

Douglas has often talked about how grateful he was to have a second chance at family life. “It’s such a joy,” he said in 2009. But having married Zeta-Jones after a contentious divorce from his first wife, Diandra Luker, that reportedly cost him more than $45 million, Douglas also knows what it’s like to face a difficult split. In a recent interview with the Daily Mirror, he reflected on that union’s bitter end, suggesting he made a mistake by going to marriage counseling for so long to try to fix it: “We should have ended the marriage 8 or 10 years earlier.”

Now, above all, Douglas “wants a peaceful life,” says the family friend. “Looking death in the eye makes you prioritize things.” Will that life be with or without Zeta-Jones? Despite tabloid speculation about a nasty divorce ahead, sources say the pair (who had a prenup) are still deciding what their future will be. And both remain devoted to their children. “I hope they work it out,” says the family friend. “They were really good together.”