After nearly 13 years of marriage, A-List spouses Michael Douglas, 68, and Catherine Zeta-Jones, 43, one of Hollywood’s most powerful and admired couples, have decided to take time apart. Insiders explain in this week’s issue of PEOPLE the reason for the sad separation, what went wrong, and what’s next. “Michael and Catherine love each other very much, [but] they’re taking a break,” says one close confidant. 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, Georgia, 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.”

Behind the scenes, Douglas and Zeta-Jones have traded off time with their kids while “still talking” to each other, a friend says. 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. 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.”

More on Michael Douglas & Catherine Zeta Jones is featured in the 9/09/13 issue of PEOPLE, on newsstands everywhere now.

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