List taxonomy terms assigned to a post in hierarchical view

If you have a need to build up an actual structure of terms, this might be a useful method for you:

/**
 * Recursively sort an array of taxonomy terms hierarchically. Child categories will be
 * placed under a 'children' member of their parent term.
 * @param Array   $cats     taxonomy term objects to sort
 * @param Array   $into     result array to put them in
 * @param integer $parentId the current parent ID to put them in
 */
function sort_terms_hierarchically(Array &$cats, Array &$into, $parentId = 0)
{
    foreach ($cats as $i => $cat) {
        if ($cat->parent == $parentId) {
            $into[$cat->term_id] = $cat;
            unset($cats[$i]);
        }
    }

    foreach ($into as $topCat) {
        $topCat->children = array();
        sort_terms_hierarchically($cats, $topCat->children, $topCat->term_id);
    }
}

Usage is as follows:

$categories = get_terms('my_taxonomy_name', array('hide_empty' => false));
$categoryHierarchy = array();
sort_terms_hierarchically($categories, $categoryHierarchy);

var_dump($categoryHierarchy);