Asher

The question presented by this appeal is whether the transfer of assets to a trustee for a specific term, under directions to pay *522 net income to designated beneficiaries, and with discretion to distribute up to one-half of the corpus to the beneficiaries for stated purposes, constitutes a “transfer by gift of ... property” within the meaning of Revenue and Taxation Code section 15201. The trial court held that it does, the taxpayer has appealed, we affirm.

Factual and Procedural Background

The facts of the case are not in dispute. On July 17, 1978, Charlene Asher, as settlor, transferred to her husband, Richard B. Asher, and her two adult children, Anne Leslie Asher and Brian Lee Asher, as co-trustees, certain securities with a market value of $250,000, under a trust agreement directing the trustees to pay the net income from the trust property in periodic installments to Anne and Brian, the income beneficiaries. The trust was to terminate not later than 10 years and 1 day from the date of the transfer, at which time the remaining trust property would revert to the settlor, Charlene. In these respects, the agreement qualified as a lawful means of diverting income…