$\frac12\left\{\left(a+b\right)^2+\left(a-b\right)^2\right\}$
= $\frac12\left\{a^2+2ab+b^2+a^2-2ab+b^2\right\}$
= $\frac12\left\{a^2+\cancel{2ab}+b^2+a^2-\cancel{2ab}+b^2\right\}$
= $\frac12\left\{2a^2+2b^2\right\}$
= $\frac12.2\left\{a^2+b^2\right\}$
= $a^2+b^2$