Analyses of evolutionary dynamics can be profoundly affected by age calibrations of phylogenetic nodes under different models of lineage branching. Most time-calibrated molecular phylogenies of extant taxa assume a purely bifurcating model, where nodes are calibrated using the daughter lineage with the older first occurrence in the fossil record. Lineages can also split via budding, in which a parent lineage persists following the origin of a daughter lineage, and nodes are calibrated using the age of the lineage with the younger first occurrence. Here, we use the extensive fossil record of bivalve molluscs for a large-scale empirical test of how the choice of branching model affects macroevolutionary analyses. We time-calibrated 91% of nodes in a phylogeny of 97 extant bivalve families using 86 calibration points ranging in age from 2.59 to 485 Ma. Allowing budding-based calibrations minimizes conflict between the tree topology and timing of evolutionary events in the fossil record, reducing the summed duration of inferred “ghost lineages,” from 6.76 billion yrs (Gyr; bifurcating model) to 1.00 Gyr (budding model). Adding 31 extinct paraphyletic families – many major groups contain such extinct taxa – shifts deep splits further back in time and raises ghost-lineage totals to 7.86 Gyr (bifurcating) and 1.92 Gyr (budding), but more accurately reflects the time since separation of lineages. Lineage-through-time plots from phylogenetic data scaled under a bifurcating model of evolution push more inferred bivalve diversification into the Paleozoic, conflicting with other palaeontological evidence on the magnitude of the end-Paleozoic extinction and subsequent recovery, and strongly reduce the magnitude of the Cenozoic diversification of the group. Consideration of the hypothesized branching model within a given clade is essential when node-calibrating phylogenies, and for a major clade with a robust fossil record, an evolutionary model that allows budding and does not force bifurcations is the most appropriate one, and likely common for many other clades as well.