Thanks for the photos, Kate.
"I was told that the roots of the tree rot easily because of overwatering." That advice could be applied to virtually any plant. The problem is that everyone has a different idea as to what "overwatering" means. I suspect that in your case you may have overreacted a bit and not watered quite enough.
It looks like some of the soil has started to pull away from the inside of the pot. If so, that is a good indication that the soil has gotten too dry.
First, pull up the inner pot to make sure that it is not sitting in water at the bottom of the outer pot. If there is no water there, then water the tree thoroughly as soon as the top inch of soil feels dry. Add enough water so that a small amount trickles through the drain hole of the inner pot. It should absorb a fair amount of water. If it doesn't, it may be because the soil is so dry the water runs straight through without being absorbed. If that is the case, then let the inner pot sit in an inch or two of water for a couple of hours to re-wet the soil.
Once the soil has been rewetted and is thoroughly saturated, then don't water again until the top inch of soil is dry. After each watering, make sure that only a small amount of water has trickled through the drain holes. Letting the inner pot sit in water for more than overnight would be considered overwatering. Likewise watering it before the top inch of soil gets dry would also be overwatering.
