We propose a phase-field model for the coupled simulation of microstructure formation and evolution, and the nucleation and propagation of cracks in single-crystal ferroelectric materials. The model naturally couples two existing energetic phase-field approaches for brittle fracture and ferroelectric domain formation and evolution. The finite-element implementation of the theory in two dimensions (plane-polarization and plane-strain) is described. We perform, to the best of our knowledge, the first crack propagation calculations of ferroelectric single crystals, simultaneously allowing general microstructures to develop. Previously, the microstructure calculations were performed at fixed crack configurations or under the assumption of small-scale switching. Our simulations show that this assumption breaks down as soon as the crack-tip field interacts with the boundaries of the test sample (or, in general, obstacles such as defects or grain boundaries). Then, the microstructure induced by the presence of the crack propagates beyond its vicinity, leading to the formation of twins. Interactions between the twins and the crack are investigated under mechanical and electromechanical loadings, both for permeable and impermeable cracks, with an emphasis on fracture toughening due to domain switching, and compared with experiments.