According to the Michigan Court of Appeals:
In sum, we hold that an engagement ring given in contemplation of marriage is an impliedly conditional gift that is a completed gift only upon marriage. If the engagement is called off, for whatever reason, the gift is not capable of becoming a completed gift and must be returned to the donor.
Meyer v Mitnick, 244 Mich App 697, 704 (2001)
Therefore, the engagement ring must be returned if the wedding is called off prior to the marriage. If the marriage ends in divorce, the wedding rings are considered separate property to be awarded to the person who received the ring as a gift.