Yes, that is precisely a 365 subscription, not a one-time purchase!
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Yes, it is silly to have to maintain a dead person's email, but that is the way MS rolls for consumers.
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It is a costco special price deal on a 365 subscription. MS has made this deal with a few, very few, companies.
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There is nothing you can do to "transfer" the subscription/license to another account. You can try "faking it" by using your own email as an "alias", that may work for what you want to do, I've never done it myself. . But definitely turn off the recurring billing. You can go back to Costco to buy another product key card at that special price to use on your correct email account when the current subscription expires. Actually, I'd suggest you buy and activate 4 of them (max). you never know how long they will offer this deal. It seems to come and go.
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Change the email for your Account – Alias
https://support.microsoft.com/en-us/account-billing/change-the-email-address-or-phone-number-for-your-microsoft-account-761a662d-8032-88f4-03f3-c9ba8ba0e00b
https://support.microsoft.com/en-us/help/12407/microsoft-account-change-email-phone-number
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When your old email address doesn’t suit you anymore, but you want to save your contacts, online storage, subscriptions, and settings, then add an alias to your existing Microsoft account. An alias is another email address that works with the same account.
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Sorry, but aliases can't be moved from one Microsoft account to another.
. · If you remove your alias from the account it’s on today, it will be deleted from our systems and isn't recoverable, so you'll no longer be able to use it to send or receive emails.
. · Microsoft doesn't recycle aliases once they are deleted. This means it won't be available again as an alias or new account to you or anyone else at a later time.
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Associate Office 2016/365 with a Microsoft accountBefore you can install your copy of Office the first time, you needed to redeem your product key (if your copy of Office came with one) and associate it with a Microsoft account. How you complete this step depends on how you got your copy of Office. Select option from list below:
· a physical copy of office from a store
· a digital copy of office from an online store
· a digital copy of office from the MS Store (online)
· a new computer that came with office pre-installed
· hup- office pro plus 2016 from the home use program
· shared 365 Home via mail invitation
How to change the email address associated with your Microsoft account
https://support.xbox.com/en-us/my-account/microsoft-account/change-email-sign-in-for-microsoft-account
Some people say these instructions are easier to follow