Income Trusts?

My parents were visiting recently and both Mom and Dad showed high interest in my bits of chatter about my passive income goals. Dad started to talk about some Oil & Gas and Energy companies he read about in the paper recently, so I brought him to my computer area and showed him the game CashFlow, the Rich Dad site in general and my Investopedia simulator and we chatted about various investing things for a while.

During our conversation, the subject of Income Funds (AKA Income Trusts, for when I use that term instead) came up as a way to generate cashflow on a monthly basis. I had seen a number of Income Funds on the TSX over time but didn't do much research on them initially because it was Just Another Thing I needed to research in this whole "investing" thing.

It was great to talk to Dad about them, because even though not much information was exchanged, it got me thinking more about them.

I need to learn more about these Income Funds because I don't understand their ultimate premise in terms of why a company would create an Income Fund and trade it publically. From what I've read about them so far (very little - again, other priorities took precident at the time), they're funds that are created by large companies with consistent profit flows, and while the fund itself can't be expected to appreciate in value very much compared to standard stocks, the fund gives "dividends" of sorts, every month, and the payouts are tax-exempt because of how things are set up.

I probably understand about 20% of what I need to understand to feel comfortable investing in Income Trusts right now, but I will be spending time this afternoon expanding my learning in this area of investing in the stock market, because from the wee little bit I know about them, they seem to match the Rich Dad concept of investing for the cashflow, not for the appreciation of value of whatever the physical investment is... but I need to figure out why a company would set up such a fund and trade it, and I need to find the fatal flaw(s)...

I wonder if these funds aren't perhaps something to do with providing retirement benefits (above CPP) to employees of these companies? I'm not sure, but that's the type of fatal flaw I need to find, so I am more comfortable that I know enough of my exit strategy prior to entering in the first place.