One is discretionary and the other is fixed.
In a discretionary or family trust the trustee has the power to select which of the beneficiaries will receive a benefit and how much they stand to gain. The trustee does not have to direct a benefit to all beneficiaries.
In a unit trust the choice rests with the beneficiaries or rather, unit holders who subscribe to a specific number of units. This is essentially a fixed trust to the extent that the trustee has no discretion and any profit/dividend is distributed proportionally according to the amount of units held.
This information is of a general nature only and does not constitute professional advice. You must seek professional advice in relation to your particular circumstances before acting.
Updated — Sep 7, 2015