NSW Clause in Trust for a minor

Probably not. The general stance is that trust and non-trust property cannot be mixed. Having the title owners as the trustee and the trust would possibly contravene that rule.

If it were allowed, and a discretionary power, it's doubtful they could be compelled to invoke it given its potential to impact the trustee's circumstances. And that's another reason why it probably wouldn't be allowed - as the trustee would be placed in a conflict situation between their own interests and those of the beneficiaries.

As for the trust buying property and the trustee residing in it, that can be okay in certain circumstances. However, beneficiaries don't get 'control of the trust' - the property either remains in the trust, or is removed from the trust and distributed to the beneficiary.

In any case, trustees are under fiduciary duties to act in the best interests of the beneficiaries. If they waste the trust property, they're opening themselves up to claim against themselves personally.

You can, of course, limit the trustees power in that respect. Trustees should be avoiding any transactions which are for their direct benefit in any case.

It's also worth considering that a trustee involves 'trust' - hence the name. If you don't trust someone, don't appoint them. Or at the very least, appoint a number of trustees jointly so that they can check and balance each other.