Microsoft 365 features that help users manage their subscriptions, account settings, and billing information.
1
When you upgrade your subscription to the Family version, you then use the process on this link to share the subscription with your partner, they can then install the Office apps using their own Microsoft account they currently use for the Microsoft 365 Basic subscription, and they will have access to all their files and the shared 2TB of OneDrive storage, they will not loose access to their files.
2
After your partner has accepted the shared subscription you have sent to them, they can cancel the Microsoft 365 Basic subscription on their account of 2TB of storage is enough storage for both of you.