dnd 5e – When stealing something, do you need to roll both Stealth and Sleight of Hand checks?

No, you don’t need to roll

Your DM could rule that, because of your creativity and roleplay, there doesn’t need to be an ability check. From the Dungeon Master’s Guide page 236:

One approach is to use dice as rarely as possible. Some DMs use them only during combat, and determine success or failure as they like in other situations.
With this approach, the DM decides whether an action or a plan succeeds or fails based on how well the player: make their case, how thorough or creative they are, or other factors. For example, the players might describe how they search for a secret door, detailing how they tap on a wall or twist a torch sconce to find its trigger. That could be enough to convince the DM that they find the secret door without having to make an ability check to do so.

Theoretically, assuming your DM allowed for it, your character wouldn’t need to roll any dice because your roleplay is good enough and makes sense in the world.

However, it seems that your DM wants some kind of roll

Not all DM’s allow roleplay to replace ability checks in every situation. Either they might not like the concept if it, they may not be convinced enough to warrant it or they might not feel its appropriate for the current situation. Whatever the case, they want you to make a roll.

I find that reducing the number of dice rolls makes the game more fluid. Additionally, the more you are made to roll, the higher the chance of failure is because you would have to pass both checks, which is statistically less likely than you only passing one or passing neither of them. If you are having to pass multiple checks, you are being set up to fail. This isn’t always a bad thing, sometimes a DM wants something to be a challenge, warranting multiple checks to succeed.

The way I would rule it is that you don’t have to roll a stealth check, you aren’t trying to hide or be unseen – you’re wearing a disguise, you’re in plain sight. Now, people likely aren’t going to notice you (unless their passive perception is exceptionally high or your disguise is exceptionally poor) or pay attention to you as your disguise means you blend in, you don’t need to roll a stealth check. Additionally, because your target is distracted, they likely aren’t going to notice someone sneaking up behind them anyway, further reducing the need for a stealth check.

However, I would make you roll a “sleight of hand” check (likely using Dexterity but I could see Charisma or Intelligence being possible alternatives) to see if you can successful pickpocket the target. I would grant advantage if your friend was distracting them based on the Working Together rule (though for it to apply, your friend’s player would need to describe how they are distracting your target, not just say “I distract him”).

As a side note, there is also the idea of “passive stealth” which might apply. I don’t know too much about it so I can’t give many details. Essentially though, its the counterpart to passive perception, where you aren’t actively trying to be stealthy, you just naturally walk quietly and go unnoticed. Your DM might try using that for future checks to reduce the number of dice rolls, it also may mean you don’t know when you’ve failed a check until its too late, which could be interesting.