In July 1929 Dempster was scarred in a car accident in California. A month later she married wealthy investment banker Edwin Skinner Larsen at her rural New York home. After the couple traveled to Europe, Dempster announced her retirement from acting. She and her husband lived in La Jolla, California. She died there on February 1, 1991 from heart failure. Carol Dempster was buried at the Forest Lawn Memorial Park cemetery in Glendale, California. Upon her death, Dempster left $1.6 million USD to the San Diego Museum of Art. The money was to add to the museum's collections of prints and drawings. She and her husband had made several previous gifts to the museum. These included Francisco Zuniga's sculpture "Mother and Daughter Seated" and Thomas Eakins' painting "Elizabeth Crowell and her Dog".