I'd downsize first, pay outright for something smaller, newer, energy efficient and low maintenance, so I'd be paying less in council tax, heating bills, utilities etc going forward.
Then I'd put my current house on the market. I'd sell at my pace, whilst doing any work required on the new place. Absolutely hate the stressful way we buy and sell property in England.
Once that was all done, and the outstanding mortgage paid off, solicitors and all other fees paid, I'd still have the original 500k.
With that, 200k for each of the DC, to pay a big chunk off their mortgages, and make their day to day lives easier.
I could do quite a bit with the remaining 100k; half to a charity I already support, who do fantastic work for underprivileged children; replace some of my tatty / dated furniture; get a new bed and top quality mattress and bedding and sleep well every night; buy a Roberts radio and some Denby crockery - I've never been able to justify the price before; city breaks to London, Paris, Rome, Berlin and Lisbon; a couple of longer holidays to the Greek Islands and Italy; finally, a spa / wellness break, followed by trip to London to buy a whole new wardrobe. And bank any remainder.
I haven't thought about this much! 😉