Family plan license not recognized in Word/Excel after joining

Yes. An expired Microsoft 365 Personal subscription and older Office sign-in state can prevent the apps from picking up the Microsoft 365 Family benefit. Joining a Family plan does not automatically switch the license already cached in Office.

Check these items next on the same Windows PC where Word and Excel show Unlicensed Product:

1. Confirm the Family benefit is attached to the correct Microsoft account
   • Go to Services & subscriptions.
   • Sign in with the exact Microsoft account used to accept the family invitation.
   • The Family benefit should appear there. If it does not, the invite may have been accepted with a different Microsoft account, or the share may need to be resent.
   • If the subscription owner shared Microsoft 365 Family, the invitee must join the owner’s family group to receive the benefit.
2. Make sure Word or Excel is signed in with the correct account
   • Open Word or Excel.
   • Go to File > Account.
   • In the top-right corner and under account information, verify the signed-in account is the same one that accepted the Family invitation.
   • If the wrong account is shown, sign out of all listed accounts, close all Microsoft 365 apps, then reopen and sign in with the correct account.
3. Restart apps after sign-in
   • Close all Microsoft 365 apps completely.
   • Reopen Word or Excel after signing in.
   • A successful license refresh can require restarting the apps.
   • To verify the active license, open File > Account and check Product Information. It should show the currently licensed product.
4. Run the Microsoft 365 activation troubleshooter
   • Use the Microsoft 365 activation troubleshooter on that same Windows PC.
   • It runs on Windows 10 or higher and can identify and fix activation issues.
   • If the blank Activate window is preventing normal sign-in, this is the next supported step.
5. If subscription features still do not appear, reinstall Microsoft 365
   • First confirm the account has an active Microsoft 365 subscription/benefit.
   • Then use the Microsoft uninstall troubleshooter to completely remove Microsoft 365 from the Windows PC.
   • Restart the computer when prompted.
   • Reinstall Microsoft 365 and sign in with the same Microsoft account that accepted the Family invitation.
6. If the Family benefit still does not show on the account page
   • Ask the subscription owner to remove and resend the sharing invitation.
   • Then accept it with the exact Microsoft account intended for Office on this PC.

A few facts relevant to this case:

• An expired subscription can leave Office showing Unlicensed Product until the apps are signed in with the account that has the current entitlement.
• Microsoft 365 desktop apps need internet access for initial activation and should reconnect regularly; otherwise they can enter reduced functionality mode and show unlicensed errors.
• If the Family benefit is not visible under the accepted account, Office cannot activate against it.

References:

• Unlicensed Product and activation errors in Office
• Update License button in Microsoft 365 apps
• Microsoft 365 subscription features aren't available in Office apps
• Share your Microsoft 365 subscription
• What's the difference between a paid Microsoft 365 subscription and the free web apps?
• Switched from my personal account to a family account owned by my cousin and I no longer have access to my files. - Microsoft Q&A
• Purchase successful but not able to associate with account. - Microsoft Q&A