In Illinois, an engagement ring is a gift in contemplation of marriage.  Illinois courts have held that gifts given in contemplation of marriage are deemed conditional on the subsequent marriage of the parties, and the party who fails to perform on the condition of the gift has no right to property acquired under such pretenses.[1]  In Carroll v. Curry, the court further opined that where an engagement is mutually broken, the donor is entitled to return of the ring. 

[1] Carroll v. Curry, 392 Ill. App. 3d 511 (Ill. App. Ct. 2d Dist. 2009)